August 17 – Uptick in Buying Presses Soybeans Higher

Down on the floor of the Chicago Board of Trade, the chatter was less about soybean prices and more about the solar eclipse that will move over the city on Monday.

While you’ll need to be a few hundred miles downstate to see a total solar eclipse, we’re still getting ready for a strange afternoon in the Second City.

That said, the broader markets saw a huge bout of volatility. The CBOE Volatility Index surged 24% on the day. Still, grain markets were mixed Thursday. While corn prices dipped again, soybeans were pushing higher. Wheat prices were off more than 1% as increased rains and grain quality expectations weighed down on prices. Let’s jump right into it.grain markets were mixed Thursday. While corn prices dipped again, soybeans were pushing higher. Wheat prices were off more than 1% as increased rains and grain quality expectations weighed down on prices.

Here’s our recap of grain prices today at the Chicago Board of Trade

Corn Prices In the Red

The  September corn futures contract dropped 2 cents on the day and closed trading at $3.50 per bushel. The December futures contract lost 2.25 cents to close a tick above $3.64.

In the corn trade, the weather was a key part of the downturn today. Despite an uptick in drought conditions across the Corn Belt, we are anticipating that temperatures will cool through the balance of the month and that more rain will arrive. As we noted yesterday, it could be too little, too late for many farmers. But who knows what the USDA will do with this information.

Given their track record, they’ll probably hike yield expectations… please excuse the sarcasm.

Today, the USDA announced that old crop sales of corn topped out at 62,424 metric tonnes. New crop sales for the week ending August 10 were ten-fold at 671,767 metric tonnes. That latter figure topped analyst expectations

While everyone was caught up in U.S. sales, China announced it has sold off more than 123,000 metric tonnes of 2014 corn. They also unloaded an extra 15,000 metric tonnes of 2013 corn. As it turns out, the total sale comprised just 17% of the amount that China was willing to sell.

Looks like the world is awash in corn…

China Boosts Soybean Prices

The November soybean futures contract pushed 7.75 cents higher to close at  $9.33. The January contract was also up 7.75 cents and finished the day at $9.41.

Earlier, the USDA reported a private sale of 165,000 metric tonnes of soybeans to China. For the week of August 10, the agency reported old crop sales of 453,000 metric tonnes. That was a massive increase from last week’s lackluster numbers.

The uptick in buying helped keep soybean prices in the green today. With wet weather on the way, and the USDA pushing higher-than-expected yields, bearish factors are in play.

Wheat Prices Dip Despite Canadian Crop Survey

In Chicago, the September wheat futures contract dropped 6.25 cents to close at $4.40.

Today, the USDA reported 2017/2018 export sales of 633,565 metric tonnes.

Bloomberg reported expectations that Canadian wheat production for the year of 26.4 million metric tonnes. A survey of analysts indicated expectations for the smallest wheat crop in seven years. The figure is also smaller than USDA projections from last week’s WASDE report.

According to the data, Canadian farmers are also expected to harvest 5.1 million tonnes of durum. That would represent a 35% decline from last year.

It would also be the smallest durum crop in five years.

The losses have been calculated up in Saskatchewan. But Ken Ball of PI Financial in Manitoba projected that crops were in better shape across Canada. Despite a few acres that had too much moisture, Ball said that things were looking good in Manitoba and in the northern areas of the nation. [1]

The news comes after the USDA projected that global stocks are on a pace to hit all-time highs, and that wheat fields in Russia and around the Black Sea will hit a new record.

On the global front, Saudi Arabia wants to purchase 480,000 metric tonnes. The Saudi Grains Organization issued the tender for delivery between October and December and will close on Friday.

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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