Stronger export expectations for U.S. soybeans and soymeal helped press grain prices higher in Chicago. Expectations that U.S. exports will capitalize on Argentina’s weather woes combined with short-covering across the complex.
Let’s dig deeper into today’s grain prices at the Chicago Board of Trade.
Corn Finds Gains, Leads Grain Prices Higher
The May corn futures contract added 3.5 cents to close the day at $3.895. The July contract added 3.25 cents and ended the day at $3.985. Even though weather delays have impacted corn planting, markets largely anticipate that U.S. farmers will make up for lost time.
Over in France, the nation’s corn planting has experienced incredible delays. For the week ending April 23, planting is just 33% complete. That is well behind the pace of 72% set at this point last year.
StatsCan says that Canadian farmers will plant 3.76 million acres of corn. It is also an all-time record high for Canada. Going into the report, the market was expecting to see 3.58 million acres. Compared to last year’s 3.58 million, 2018 Canadian corn acres are up by 180,000 acres or 5%.
Soybean Prices Pop on Argentina Woes
The improving prospect of U.S. soymeal exports helped push prices higher for beans in Chicago. The May soybean contract added 17 cents to end the day at $10.45. The July futures contract added 16.75 cents to hit $10.5625.
May soymeal contracts also popped 3% on improving export prospects. As we recently noted in GrainCents, Argentina’s drought has dramatically lowered its production output. This factor – in addition to the threat of Chinese tariffs on U.S. exports – has pressed local prices higher.
As a result, crushing margins in Argentina are narrowing and output has been constrained by supply concerns. This is why Argentina has been importing U.S. beans. They need to bolster their crushing output. With their costs rising, the U.S. has the potential to capture some of its competitor’s market share.
Today, Statistics Canada released its acreage report. The agency said that Canadian farmers planted 22.99 million acres last year, and cut its 2018 expectations by 7%.
StatsCan says that Canadian farmers will plant 6.45 million acres of soybeans. Going into the report, the market was expecting to see between 6.80 million and 7.85 million acres, so you could argue that this report is mostly bullish for soybean prices in Canada.
This report came as India announced it will increase its soybean acreage by as much as 15% in 2018. That would be a significant jump from the 26.2 million acres planted last year.
Wheat Prices Push Higher
Next week, the annual Winter Wheat tour will kick off. Traders wasted no time speculating that crop quality will remain weak. In Chicago, May SRW contracts added 14.75 cents to close the day at $4.955. In Kansas City, May HRW contracts added 11.5 cents to close at $5.1375.
May MGEX spring wheat prices added 6.75 cents and closed at $6.0725. Spring wheat prices popped even though StatsCan reported that wheat acreage in Canada will hit 25.25 million acres. That figure is a 13% jump from last year. Going into the report, the market was expecting to see on average 23.04 million acres, so you could argue that this report is mostly bearish for wheat prices.
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