February 8: WASDE Report Delivers Mixed Day for Grain Prices

The February WASDE report offered a few small surprised Thursday. The monthly report offered bearish figures in the wheat sector, some positive news for corn producers, and mixed numbers in the soybean complex.

We tackled the big numbers earlier in today’s WASDE report recap.

A more than 1,000-point drop in the Dow Jones overshadowed grain trading today. Eyes were more fixed on equity trading in New York than agricultural commodity flows in Chicago. But we were still at work… we always are.

Here’s more on what you need to know from the Chicago Board of Trade.

Soybean Prices Push Higher  

Today, it took soybean traders a little time to digest the somewhat positive WASDE report.

But the March contract added 4.75 cents to close just under $9.88. The May contract added 4.5 cents and finished a tick under $9.99.

The USDA finally cut its expectations for the Argentine soybean crop by 2 million metric tonnes. The agency says that Argentina will produce 54 MMT.

That figure is still above a number of analysts who have raised concerns about soybean quality and yields due to harsh weather. The Buenos Aires Grain Exchange has cut its production figure down to 50 MMT, a downward revision of 1 MMT.

The USDA reported 743,223 MT of old crop soybean export sales during the week of 2/1, edging out expectations. That was more than double last week’s sales and 61.4% larger than this week last year.

Corn Prices Add Small Gains 

Corn prices pushed higher, largely thanks to an uptick of 125 million bushels of corn exports in the WASDE report. The USDA also said that world ending stocks decreased from 206.57 MMT to 203.09 MMT.

Also positive news, the USDA slashed Argentina’s production estimate down to 39 MMT. That figure was a 3 MMT decline from the January estimate.

But any optimism over that change was short-lived. The USDA left the Brazilian output figure at 95 MMT. Analysts had expected an average decline to 93.7 MMT.

March corn prices added 0.5 cents to close at $3.655. The May contract added 0.5 cents and finished just above $3.73 per bushel.

Today’s positive uptick in U.S. exports was bolstered by last week’s strong export figure. The USDA said that total exports for the week came in at 1.77 MMT. That was an 82% increase from the same period in 2017.

The US did not change its production figure for the Brazilian corn crop. The agency said that Brazil’s output would be 95 MMT. That decision was strongly different than CONAB’s most recent production. CONAB slashed its Brazilian figure by 4.34 MMT to 88.01 MMT.

Wheat Prices Dip in Chicago

In Chicago, the March SRW contract dipped 4.25 cents and closed just above $4.56. The May contract shed 3.75 cents and finished just above $4.69. In Kansas City, the March contract dipped 6.5 cents to close at $4.745 per bushel. The May contract dipped 6.25 cents and closed at $4.895.

The USDA said that global wheat inventories declined from 268.02 MMT to 266.1 MMT. But it did feature a 20 million bushel increase in ending stocks for the U.S.

Most notable was the issue of shifting power in the global wheat trade is experiencing a shakeup.

The USDA confirmed that Russian, Argentinian and Canadian exports are reducing demand for shipments from the United States and the European Union. This was a recent topic I discussed in GrainCents and told readers to look out for in this report. The reason prices ticked higher came down to ending stocks, which increased by 20 million bushels.

The WASDE report overshadowed the weekly export report from the USDA. The agency said that export sales hit 393,437 MT of old crop. That figure was almost 25% below last year’s figure. However, it was about a 36% increase from last week.

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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