It’s going to be a busy week for grain traders and grain prices.
Later this week, the USDA will release its monthly World Agricultural Supply and Demand Estimates (WASDE).
However, traders are already reacting to rumors that supply totals are poised to rise in Friday’s report.
The buzz pushed corn and wheat prices in Chicago down nearly 1%. Soybeans followed its friends lower.
The supply woes offset bullish sentiment from last week over the deep freeze that swarmed the United States after New Year’s Day. What else happened today in the markets?
What’s the subject of our daily recap of grain prices from the Chicago Board of Trade
March Corn Back Under $3.50
I spent most of November watching corn dance around that $3.50 level, and now my life is starting to feel like the plot of Groundhog Day.
With this Friday’s WASDE report in focus, March corn prices fell 4 cents to close the day a tick above $3.47. May corn futures contracts shed 3.75 cents to finish the day at $3.555 per bushel.
Today’s downturn came despite positive export numbers from the USDA. Total export inspections came in at 34.4 million bushels, a figure that beat the top-end of trade estimates (31 million). It was a positive report because we saw that Mexico was the top buyer.
As I mentioned in our GrainCents 2018 Corn Outlook, NAFTA is a concern for farmers in the year ahead. It’s positive to see that Mexico is buying U.S. corn despite rising populism and protectionism starting to spread across the country ahead of its national elections.
Soybean Prices Slip on Bearish WASDE Hopes
January soybean prices dipped 3.25 cents to close the day a tick above $3.58 per bushel. The March contract shed 4 cents to finish just under $9.67 per bushels. We’re hearing some rumblings across the universe that analysts expect an uptick in soybean stocks in the wake of the harvest.
We’ll also be keeping a close focus on yield expectations in Friday’s report.
Soybean prices fell Monday despite strong weekly export numbers and bullish numbers out of Argentina.
The 43.5 million bushels reported by the USDA were on the high side of trade estimates.
Meanwhile, we saw some news about weather down in South America that was positive. While Brazil is facing rain across soybean producing states, Argentine farmers are still behind on planting progress, a trend we’ve noted in in recent weeks.
Wheat Prices Wilt on WASDE Woes
Lackluster wheat export numbers didn’t generate too much attention Monday. Instead, the focus is on ending stocks ahead of Friday’s WASDE report. The USDA reported wheat exports of 8.6 million bushels, which was one the low-end of trade estimates.
In Chicago, March SRW contracts slipped 3 cents to close just under $4.28. The May contract dropped 2.25 cents to close at $4.405.
In Kansas City, March HRW contracts fell 4.25 cents to finish just above 4.33. The May 2018 contract shed 4 cents to close at $4.47.
MGEX March contracts dipped 1.25 cents to finish at $6.255. The May contract dipped 1.75 cents to finish at $6.305.
We’ve noted that U.S. Wheat Associates closed its office in Cairo, Egypt last year due to rising pressures from the Black Sea region. The trade group expanded its marketing efforts in Morocco, and it appears that some progress was made today. The African nation will purchase 11.6 million bushels of U.S. soft wheat.
U.S. Oil Prices Top $62.00
The WTI price topped $62.00 Monday thanks to ongoing geopolitical tensions around the globe. Protests in Iran and the political detention of Saudi princes offset concerns about surging U.S. oil production. We haven’t seen U.S. production hit these levels since the early 1970s, and we could be facing a scenario where output tops 10 million barrels per day.