August 7: Soybean Prices Pop on China Buying Rumor

 Soybean prices ticked higher Tuesday as markets digested Monday’s crop progress and quality report from the USDA. A greater-than-expected dip in soybeans rated G/E helped push front-month and next-month contracts up double digits in Chicago. Meanwhile, wheat prices and corn prices dipped as some traders took additional profits off of the table.

Here’s what else you need to know about grain prices in Chicago.

Soybean Prices Jump 1.5%

Soybean prices popped in the wake of Monday’s crop progress report and suggestions that China may need to return to the U.S. markets for the commodity in the next few weeks. Analysts at Oil World stated that an ongoing shortage of beans from South America makes the U.S. the likely source of origin for about 15 MMT from October 2018 to March 2019.

Today, the USDA reported that 67% of the U.S. soybeans crop is rated good-to-excellent, which is 7 points ahead of the rating at this time a year ago and 1 point ahead of the 5-year average.

Soybeans Prices Crop Condition

September soybean prices added 12.5 cents on the day.

November contracts also added 12.25 cents to close just under $9.06 per bushel.

This morning, the USDA reported a private sale of 145,000 MT to unknown destinations for new crop soybeans.

Markets are preparing for this week’s release of the August WASDE report. Average estimates have put total production at 4.407 billion bushels on 49.6 bushels per acre. The average estimate is 97 million bushels higher than the July estimate.

Be sure to sign up for a free three-week trial to GrainCents, and get access to our pre-WASDE coverage.

Wheat Prices Retreat

Wheat prices in Chicago retreated as traders took some profits off the table. September SRW wheat prices dipped 6.25 cents to close just above $5.68 per bushel. December contracts fell 7.25 cents to end the day at $5.90.

Wheat prices had whipped higher in the session with the September contract jumping to as much as $5.86 per bushel. But prices slipped after traders took some profits off the table.

Markets were reacting to yesterday’s crop progress report, which indicated that 90% of the winter wheat crop has been harvested as of August 5.

September HRW contracts in September shed 6.5 cents to close at $5.795. The December contract shed 6.75 cents to close a tick above $6.07.

The downturn came despite new that spring wheat quality declined last week. The USDA said yesterday that the amount of spring wheat rated G/E sat at 74%, a figure that was a 4-point decline from the previous week.

Spring wheat prices for September shed 0.5 cents to end the day a tick under $6.28. The December contract fell 0.75 cents to end the day just under $6.45 per bushel.

Corn Prices Fall Tuesday

In Chicago, September corn prices shed 0.25 cents on the day to close just under $3.71. The December contract shed 0.75 cents to close at $3.845. Markets largely focused on updated trade estimates for production in this Friday’s WASDE report.

The average trade estimate is 176.2 bushels per acre, a figure that would set production at roughly 14.411 billion bushels. That would be an uptick from July’s estimate.

Markets largely ignored yesterday’s update to corn quality. The USDA said that all corn rated G/E was 71% as of Sunday. That number represented a 1 point dip from the previous week’s report.

US Corn Crop Condition

The USDA also reported that 96% of the American corn crop is silking, which is 6 points higher than 1 year ago and 5 points ahead of the 5-year average of 91% silking.

US Corn Silking Progress

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About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

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