May 8: Bargain Buyers Loved Soybean Prices Tuesday

President Donald Trump announced plans to exit the Iran Nuclear Deal. The decision rattled investors up in New York. But in Chicago, buyers were snapping up corn, soybeans, and wheat. Soybean prices pushed back up after Monday’s selloff. Corn prices and wheat prices also found gains as traders looking for value in the market.

Here’s more on what pushed grain prices higher in Chicago.

July Soybean Prices Rise

July soybean prices added 8.75 cents to close the day a tick above $10.20. The August contract added 8.5 cents and ended the day just above $10.23.

Bargain buyers were snatching up U.S. beans after yesterday’s large selloff and news that soybean planting is 15% complete.

We did see a dip in Chinese soybean imports in the month of April. The country imported 6.92 MMT last month. That was a 14% drop compared to the same period last year. Analysts have blamed new taxes and tougher inspections for the double-digit drop.

As we’ll explain in GrainCents on Wednesday, countries around the globe are lining up to exploit any weakness in U.S.  trade policy. Who will be the winners?

Sign up for a free trial of GrainCents, and start getting our contrarian insight, right away.

The final story worth consideration ahead of Thursday’s WASDE report is from Brazil. Today, AgRural hiked its Brazilian soybean forecast for 2018/19 to an amazing 119.2 MMT.

That is a 200,000 increase from its previous estimate.

Corn Prices Get Small Bump

July corn prices added 2.5 cents to close the day above $4.03. The September contract added 2.75 cents. That contract is now sitting at $4.1125.

Markets were reacting positively to news from the Trump administration. The President supports counting ethanol exports toward U.S. biofuel laws. In addition, Trump echoed support for year-round E15 sales.

Should both become official policy, it could be a boon to U.S. corn producers.

Overall, markets largely dismissed yesterday’s crop progress report. As we noted, U.S. farmers are 39% done with corn seeding. American farmers made up 22 percentage points over the last week. However, the U.S. is still 5 points behind the five-year pace.

Tomorrow, we’ll see a lot of table-setting ahead of Thursday’s WASDE report. It’s going to be a scorcher of a report, and I’ll be diving into expectations on Wednesday afternoon.

Be sure to return to Grain Markets Today for more insight.

Finally, corn markets were taking in the news that AgRural had cut its estimates for Brazil’s second corn crop. Analysts reduced expectations by 2.7 MMT or 4.4%. The group’s new number is 57.2 MMT, a figure it projected based on analysis of below-average rains in key producing states.

The group also said that Brazil’s first crop — currently being harvested — would come in at 26.7 MMT. That is a 500,000 MT jump from AgRural’s estimates last month.

Chicago Wheat Prices Get Bump

July SRW contracts in Chicago gained 3 cents on the day. The July contract closed the day at $5.145. The September contract added 2.75 cents and closed trading at $5.315. Delays in winter wheat heading (33% this year compared to the five-year average of 41%) have offered a bit of support to prices. However, markets did react negatively to news that the winter wheat crop improved in condition. Yesterday, the USDA reported that wheat graded “good-to-excellent” jumped from 33% to 34% over the last week.

Down in Kansas City, wheat prices actually declined. The July HRW contract shed 1.25 cents to end the day just above $5.38. The September contract shed 1.75 cents and closed at $5.665.

Spring wheat prices found gains in the afternoon. The July 2018 MGEX contract added 3 cents and finished at $6.14. The September contract shed 2.75 cents and closed at $6.21.

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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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