April 11: Grain Prices Fall in Post-WASDE Selloff 

Grain prices dipped in Chicago Wednesday. Markets retreated the day after a relatively neutral WASDE report hit the grain complex.

Traders were largely focused on tomorrow’s weekly export report and daily weather recaps across the U.S. Plains.

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

Wheat Leads Grain Prices Lower

Down in Kansas City, HRW prices for May fell 5 cents to close the day just under $5.17 per bushel. The July contract fell 4.75 cents to end the day just under $5.36.

May SRW prices fell 4.75 cents to end the day a tick above $4.87 per bushel. The July contract shed 4.25 cents to end the day at $5.045.

Markets were responding to yesterday’s WASDE report, which projected a 6.5% jump in global stocks compared to the 2016/17 calendar. However, the U.S. wheat inventories are expected to decline by about 10% compared to the previous year.

We know from this week’s crop progress report that the winter wheat crop is finally out of dormancy. The question is how much development will occur with the threat of winterkill and other damage after a long, dry winter. The thing is… the dry weather isn’t expected to end in Texas, Oklahoma, and Kansas. Even though the winter wheat crop is sitting at its worst quality levels in 16 years, there’s always room for more damage.

Finally, in Minneapolis, the May spring wheat contract gained 2.5 cents to end the day at $6.29 per bushel. The July MGEX contract added 2.5 cents to close just under $6.39. Spring wheat prices pushed higher thanks to expected delays in the spring wheat crop. The next 10 days calls for colder temperatures across the planting states.

Up in the Canadian Prairies and northern U.S. Plains, there’s an increasing probability of snow next week.

Tomorrow, the USDA will report export sales for the week ending April 5. Trade expectations call for exports to come in between 150,000 MT and 350,000 MT. New crop sales are expected to come in between 100,000 MT to 300,000 MT.

Corn Prices Retreat After WASDE Report

Corn prices for May lost 2.25 cents to end the day at $3.87 per bushel. The July contract shed 2 cents to close the afternoon at $3.9575.

Today featured a light day of data, with the Energy Information Administration’s weekly ethanol update leading the day. The agency reported production of 1.034 million barrels of the biofuel per day. That was about a 4,000-bpd decline from the previous week. We also saw stocks fall to their lowest levels since November thanks to a 579,000-barrel decline.

Given today’s light calendar, traders were starting at trade expectations for tomorrow’s weekly export sales report. The trade range for tomorrow falls between 900,000 MT and 1.4 MMT for old crop. Expectations for new crop range from zero to 300,000 MT.

For a recap of corn numbers from Tuesday’s WASDE report, go here.

Grain Prices Affected by Soybean News

May 2018 soybean prices were off 2.25 cents to close the day just under $10.48 per bushel. The July contract fell 1.5 cents to close just under $10.59.

It was another interesting day on the global export markets. Argentina surprised everyone again by picking up another 120,000 MT of new crop U.S. soybeans. Mexico also purchased more than 141,000 MT of new crop. This was the fourth-straight day that the U.S. agency reported a large export figure. The agency reported sales of 120,000 MT to Argentina and 134,000 MT to China yesterday. Orders of 230,000 MT and 280,000 MT were announced to unknown destinations earlier this week as well.

Some traders took gains a day after the USDA slashed the U.S. ending stocks figure and slashed Argentina’s production expectations by another 7 MMT to 40 MMT.

Tomorrow, the USDA will report weekly export sales. Trade expectations range for old crop between 900,000 MT and 1.4 MMT. Old crop sales are pegged between 400,000 MT and 600,000 MT.

Finally, a lot of the trade war talk has abated in recent days. China’s leadership has announced further intentions to open the market to global companies. As a result, soybean prices have largely recovered, and many farmers are looking at more attractive opportunities right now. As I explained over the weekend, everyone needs to take a deep breath here.

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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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