March 28: Grain Prices Dip Ahead of Prospective Plantings Report

Grain prices were largely in a holding pattern ahead of Thursday’s Prospective Plantings report from the USDA. Markets were also taking a wait-and-see approach before tomorrow’s weekly export sales report as well. A stronger U.S. dollar weighed on commodity prices in Chicago, Kansas City, and New York.

Here’s our daily recap of grain prices from the Chicago Board of Trade in Chicago. 

Corn Prices Dip Ahead of Export Report

May corn prices dropped 0.5 cents to end the day at $3.735. The July contract dipped 0.25 cents to end the day just above $3.82 per bushel.

The Energy Information Administration reported daily ethanol production for the week ending March 23 at 1.039 million barrels per day. That was a decline of about 10,000 barrels per day from the previous week. The agency’s report also indicated that ethanol stocks declined by nearly 1 million barrels for the week.

Tomorrow, we’re looking for export sales of old crop to come in between 1.2 MMT and 1.5 MMT, according to trade estimates. New crop sales expectations range between 200,000 MT and 400,000 MT.

The other estimate is to watch is on corn plantings. The average analyst estimate according to Reuters is 89.42 million acres, a figure that is slightly lower than estimates from 2017.

We’re also paying close attention to crop expectations out of South American nations. AgroConsult projected today that Brazil’s second season crop could come in around 63 MMT. Meanwhile, we’re starting to hear some whispers that Argentina’s crop could fall below 30 MMT. 

Soybean Prices Slide on Brazilian Bump

May soybean prices fell 1.5 cents to close at $10.18 per bushel. The July contract shed 1.5 cents to end the day just under $10.29. The downturn came on news that Brazil is poised for yet another record soybean crop. Today, AgroConsult projected that Brazil’s soybean crop will come in around 118.9 MMT. That figure was a 1.4 MMT increase from the group’s previous projection.

The group also projects that Brazil’s exports could top out at 72 MMT. Naturally, that export figure is generating a lot of buzz given rising Chinese demand and threats of trade restrictions on U.S. soybeans. It’s worth noting that Chinese demand is too robust to generate enough soybeans from just Brazil and Argentina.

Today, we noted in GrainCents that soybean prices would likely decline in the short term if China does place restrictions on U.S. soybeans. However, the downturn would likely be short-lived as other markets begin to absorb American supply over time.

Will there be more bearish news for soybeans tomorrow? Projections ahead of the Prospective Plantings report indicated that U.S. farmers will plant more soybean acres than corn acres. According to Reuters, the average analyst estimate for soybean plantings is set for a record 91.056 million acres. That would be a 1% increase from the previous year.

Tomorrow, we also must pay close attention to the USDA’s weekly export sales report. Trade expectations range between 600,000 MT and 900,000 MT for the week ending March 22.

Wheat Prices Dip Ahead of Plantings Estimates

May SRW prices shed 3.5 cents to close the day at $4.455 per bushel. The July contract dropped 3.75 cents to end the day a tick below $4.63.

In Kansas City, the HRW contract for May ended down 3 cents at $4.61. The July contract shed 3.5 cents to close at $3.80 per bushel.

Finally, the MGEX spring wheat contract for May closed down 3.75 cents to end the day at $5.895. The July contract shed 3.75 cents to close at $5.98 per bushel.

Tomorrow, the USDA will report weekly export sales. Trade expectations for the week ending March 22 range between 200,000 MT and 400,000 MT for old crop, and new crop figures between 50,000 MT and 250,000 MT.

On the plantings side, Reuters notes that hte average estimate for all U.S. wheat is set at 46.297 million acres. Tomorrow, we’ll be digging into the numbers for our GrainCents subscribers and giving them insight on where we see prices heading into the summer.

Now is the perfect time to sign up for a three-week trial to get this insight.

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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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