February 2: Grain Prices End Week in the Red

Today, grain markets took a backseat to the 666-point slump on Wall Street. Grain prices dipped Friday, but did anyone notice?

The futures markets were going crazy, but ag traders couldn’t poke their noses into the headlines.

Of course, we kept our focus on the agricultural sector. Most important, it’s been 12 straight weeks that drought conditions expanded across the country.

That has a lot of people speculating on the weather impact ahead of the February USDA World Agricultural Supply and Demand report.

Here’s what else you need to know from the Chicago Board of Trade.

Corn Prices Retreat Slightly

Corn prices closed the week higher, but today saw a small downturn. March futures dipped 0.25 cents to finish the day at $3.6150.

The May futures contract shed 0.5 cents and closed at $3.695.

Today there wasn’t a bullish or bearish story that moved markets.

The USDA reported two large sales across the export system. Egypt, which is buying everything these days, purchased 170,000 MT. The USDA also reported another 195,000 MT to unknown destinations.

Aside from that, the focus was on South America. We saw Informa Economics slash its production estimate for Argentina, which isn’t surprising. Dry, hot conditions have persisted for most of the crop season. The cut wasn’t small either.

Informa says the total corn crop will be 37 MMT. That was a 500,000 tonne cut from its previous estimate but 5 million tonnes below the current USDA estimate.

Also, Brazil’s  trade leaders said they shipped just over 3 million tonnes for January.

That number was more than 100% higher than shipments in January 2017.

As a sidenote, our friends at AgChieve had some interesting perspective on corn prices versus barley prices in Western Canada. It coincides with the GrainCents timestamped call on January 15th to sell feed barley.

Soybean Prices Dip Friday

March soybean prices fell 6.25 cents to slide under $9.79 per bushel. May contracts dropped 6.25 cents to close just above $9.90 per bushel.

We’re looking at the lowest soybean export figures in seven months.

Brazilian farmers have made more harvest progress on what looks to be a new production record.

On Friday, AgRural hiked its projection for Brazil’s soybean production by another 2.2 million metric tonnes. The group now expects a record 116.2 MMT due to higher projected yields. This figure would blow past the 114.1 MMT posted during the 2016/17 harvest.

Meanwhile, Informa announced its production forecast at 112.5 MMT for Brazil.

Wheat Prices Slip Across U.S.

In Chicago,  SRW prices dipped 4.25 cents to finish the day just under $4.47. May contracts shed 4.5 cents to close just under $4.60.

Meanwhile,  March Kansas City HRW futures slipped 4 cents and finished at $4.63. The May contract dropped 3.5 cents to close a tick above $4.78 per bus

The losses also extended to the spring wheat market. MGEX futures for March shed 8 cents and finished at $6.04. MGEX spring wheat prices dipped 7.75 cents closed just under $6.15.

Today, we learned that Egypt’s GSASC purchased 180,000 MT of Russian wheat. The deal came shortly after GASC announced it reduced its protein content standard from Black Sea producers. GASC says that it will accept 11.5% protein content, down from 12%.

Ahead of the WASDE report on Thursday, February 8, the USDA says that global wheat inventory levels this year sit at a record 268 million metric tonnes.

But the International Grains Council projects that stocks could soon go in reverse.

That’s because global production is slated for a 2% drop in 2018/19.

That’s all we have for you today on a busy day of trading.

Check back tomorrow for more insight. Be sure to sign up for the Breakfast Brief each morning, and start making your grain marketing more profitable. We’ll talk to you tomorrow.

 

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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