May 10: Grain Prices Mixed After May WASDE Report

On Thursday, the USDA released its monthly WASDE report. We saw a string of surprises, notably an uptick in U.S. export projections and carry out in both the corn and soybean complex.

Although we did a dive into the report earlier today at FarmLead Insights

And we dove even deeper on corn, soybeans, and wheat for our GrainCents subscribers…

Let’s take a look at what else drove today’s grain prices at the Chicago Board of Trade. 

Corn Prices Dip in Afternoon Trade 

July corn prices fell 0.75 cents to close the day at $4.02 per bushel. The September corn contract fell 0.75 cents to end the day a tick above $4.10.

Today, in the May WASDE report, the USDA projected that US corn production will come in at 14.0 billion bushels thanks to a decline in yield and acreage. The agency anticipates a yield of 174.0 bushels per acre. The agency did not change corn stocks for 2017/18 at 2.182 billion bushels.

On the South American front, the USDA didn’t move on Argentine production. They maintained the figure at 33 MMT for 2017/18. With Brazil, the agency cut its 2017/18 projection by 5 MMT to 87 MMT.

That latter figure is actually now lower than projections from CONAB. The Brazilian agency set its 2017/18 production figure at 89.21 MMT.

Global stocks for 2018/19 were 500 million bushels lower than the previous marketing year.

Meanwhile, markets were digesting this morning’s crop sales report. Net sales came in at 695,600 MT for new crop. That figure is a 32% drop from the previous week.

Total exports were pegged at 1.78 MMT, a 21% jump from the previous week. The top-five destinations were Mexico (337,800 MT), Vietnam (266,500 MT), Japan (187,300 MT), South Korea (137,300 MT), and Taiwan (109,200 MT).

Soybean Prices Find Gains on Bullish WASDE

The July soybean contract added 5.5 cents to close the day just above $10.21. The August contract added 5.5 cents to end the day just under $10.25.

This was mainly because today’s WASDE showed the USDA slashing old crop stocks by 20 million bushels to 530 mbu.

The agency expects that new crop stocks will come in at 415 million bushels. This is the result of a downturn in production at 4.28 billion bushels.

Meanwhile, the agency hiked Brazilian production to 117 MMT, a figure that washed out the reduction in Argentina from 40 MMT to 39 MMT.

The other key figure is the update on Chinese imports. The agency expects that China will import 103 MMT of soybeans in the year ahead. That is a 6 MMT increase from the previous year.

Today, the USDA said that old crop sales came in at 354,300 MT. That was a 15% decline for the previous week.

Total exports came in at 471,900 MT. That figure was a 32% from the previous week. The number is down 1% from the same period in 2017.

The top five destinations for U.S. soybeans were Netherlands (85,100 MT), China (75,400 MT), Tunisia (66,700 MT), Pakistan (65,900 MT), and Mexico (50,700 MT).

Wheat Prices Slide on Rising Global Output 

In Chicago, SRW wheat prices fell 4 cents to end the day at $5.065. The September contract shed 4.25 cents to end the day at $5.23 per bushel.

In Kansas City, HRW contracts dipped 4.5 cents to end the day at $5.27. The September contract shed 4.25 cents to close at $5.455.

Spring wheat prices also dipped on Thursday. The July MGEX contract shed 2.25 cents to close the day just under $6.16.

Today, the USDA reported that U.S. wheat production will come in at 1.821 billion bushels for 2018/19. Total winter wheat is projected to come in at 1.192 billion bushels. HRW projections sit at 647 million bushels, while SRW bushels are pegged at 315 million bushels.

In addition to the USDA WASDE report, today’s wheat export sales report was dismal.

Weekly net sales of wheat came in at 35,200 MT for old crop. That figure was off 85% from the previous week.

Export inspections were up on the week. At 321,900 MT, the figure came in 14% higher than the previous period. The top five export destinations were Japan (89,500 MT), the Philippines (61,900 MT), Taiwan (40,300 MT), Mexico (38,400 MT), and Honduras (21,300 MT).

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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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