August 31 – Spring Wheat Prices Tumble In Reaction To Canadian Production Report

The 2017 Farm Progress Show concluded on Thursday afternoon, and we were there to take part in one of the best events of the year. Our team Brennan Turner, Doug Kirk, and Aaron Seacrest spent four days talking to farmers, sharing insight, and helping them get the best price for their grain.

While I’m still compiling my insight on what I saw during my first trip to Decatur for the annual event, I had to get back to Chicago to report on weekly export figures and capture the action at the Chicago Board of Trade Thursday. Here’s our daily recap of grain prices from Chicago.

Corn Prices Get a Double-Digit Bump

The September corn futures contract gained 12.75 cents to close the day above $3.42. The December contract ticked just below $3.58 after a 12.25 gain on the day.

What had the market in motion? The weekly export sales update did offer some assistance. Old crop exports from last week were on the high end of expectations. All told, old crop shipments were just above 188,000 metric tonnes. New crop sales were also roaring.

All told, 804,167 metric tonnes of new crop were reported. That’s about a 24% jump from the same period last year.

Brennan offered some insight into the report from Stats Canada this morning. The report indicated about a 3.4% jump in corn production in 2017 from the year prior. All told, total corn production sits at 13.645 million metric tonnes.

China was still busy selling old corn. Really old corn.

The nation sold more than 757,000 metric tonnes of 2014 corn. They also unloaded about 156,000 metric tonnes of 2013 corn.

Soybeans Rally Double Digits

There was certainly a bullish roar after the Stats Can report earlier today. Canola production up north came in lower than expectations and off more than 7% from the previous year’s figures.

That said, Canada is on pace for about a 19.8% increase from last year’s crop.

In Chicago, the September soybean contract added 13.25 cents to close the day a tick above $9.36. The November contract gained 12 cents to finish the day at $9.45-2.

Once again, we were looking at USDA export figures.

Total private export sales came in at 132,000 metric tonnes to unknown destinations. China also bought about 210,000 metric tonnes for shipment before midnight tonight.

Wheat Whips Higher in Chicago, Down in Minneapolis.

It was a wild day in the wheat market. We saw gains in Chicago and Kansas City.

The Chicago SRW contract added 6.75 cents to close the day above $4.10. The December contract added 4.75 cents and closed at $4.345.

Down in Kansas City, the September HRW contract added 8.5 cents. The contract finished at $4.08-6. The December contract added 7 cents to finish a tick above $4.36.

The spring wheat contract was not reacting well to the Canadian production report.

 

Export sales were strong for the new crop year. But once again we were more focused on Canadian production. Stats Canada reported total wheat production at about 25.5 million metric tonnes.

The most noticeable decline came in the durum markets. We saw a 50% decline from last year’s durum production. That’s about 3.90 million metric tonnes.

The September spring wheat contract shed 14.75 cents to close the day at $6.185. The December contract was off 15.25 cents to close at $6.405.

On the international front, most of the oxygen is being sucked out of the markets by Russia. While the United States, Australia, and Canada have been impacted by significant drought conditions, Russian exports are the king.

Still the largest exporter of wheat on the globe, Russia is gaining more demand from local Asian customers. Bloomberg did a fabulous review of current international conditions and how Russia is improving its grip on the market. The new marketing year appears to show Russian gaining global market share, primarily at the expense of Australia. [1]

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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