July 2: Grain Prices Crater Over Trade Fears

Ongoing trade fears rattled investors’ confidence and grain prices in Chicago. Wheat, corn, and soybean prices gave back all of their gains from Friday afternoon.

With tariffs looming in the next few days, markets are increasingly worried that good weather will compound pressure on grain prices.

Meanwhile, a left-leaning politician won the election in Mexico at the same time that Canada hit back on the U.S. with its own set of tariffs.

Let’s take a look at grain prices at the Chicago Board of Trade.

Corn Prices Retreat Yet Again

Corn prices hit new contract lows for both old crop and new crop Monday.

September 2018 contracts shed 12.75 cents to close at $3.375 per bushel. The December contract fell 12.5 cents to close at $3.59.

There have not been any signs right now that weather could impact the crop. However, as we explained in GrainCents on Sunday, we could see a historical event that draws comparisons to 1995.

Today, the USDA said that the country exported 60.6 million bushels last week. That was well ahead of trade expectations.

The USDA reported crop conditions after the bell today. The agency said that U.S. corn rated good-to-excellent (G/E) came in at 76%.

That figure was 1 point under last week’s rating and 5 points above the 5-year average.

Soybean Prices Test Two-Week Lows

Soybean prices couldn’t rebound today despite a nice pop during the afternoon. With old and new crops sitting near 2-week lows, the focus is back on Chinese tariffs. We saw that China has taken far fewer soybeans thanks to the ongoing trade spat.

August 2018 contracts lost 10 cents to close the day at $8.535. The November contract shed 10.5 cents to end the day at $8.965.

Today, export inspections confirmed the fears held about China. The world’s top soybean importer took in just 100,000 bushels for the week. The total 31.2 million bushels topped last week’s figure. And that number is about 200% higher than the same period last year.

Meanwhile, the USDA announced that soybeans rated G/E came in at 71% for the week ending July 1. That number is 2 points lower than last week’s rating. It’s also 6 points higher than the 4-year average.

Finally, the USDA announced that the May crush came in at 172.5 million bushels.

Wheat Prices Collapse in Chicago

It was yet another ugly day in the wheat markets. In Chicago, September SRW contracts hit a 4-month low. A 21-cent decline left September contracts a tick above $4.80.

In Kansas City, the September HRW contract shed 17.75 cents to close the day just under $4.71.

Today, the USDA reported that 41% of the winter wheat crop has been harvested. That was a big jump from the 14% reported last week. That figure is also 2 points higher than the pace from last year.

Meanwhile, the agency said that 37% of the winter wheat crop was rated G/E. That figure is 11 points lower than the ratings from last year.

In Minneapolis, spring wheat contracts for September hit a new low. The contract shed 9.75 cents to close the at $5.27. The USDA reported that 77% of the spring wheat crop is G/E.

That figure is in line with the number from last week. It was also 40 points higher than the ratings from 2017.

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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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