July 18 – Corn Prices Rise as Dollar Continues to Slide

A sliding U.S. dollar and expectations for hot summer weather continued to push corn prices and soybean prices higher on Tuesday. Despite three interest rate hikes in the last eight months, the dollar has declined to its lowest level since September 2016. Markets appear concerned that the Trump administration will be less likely to press forward on tax reform and infrastructure spending following the GOP’s failure to push healthcare reform forward.

That wasn’t all that was driving grain prices at the Chicago Board of Trade Tuesday.

Here’s our daily recap of grain prices and events happening across the agricultural markets.

Corn Prices Tick Higher on USDA Progress Report

Monday’s crop progress report helped propel futures contracts higher on the Chicago Board of trade. The September corn futures contract added two cents to finish the day at $3.77.

Meanwhile, the new-crop December contract added 2.75 cents to finish just below $3.91 per bushel.

Weather reports across the Midwest and Northern Plains forecast more heat in the coming days. The weather complemented news that silking levels came in last week lower than average, and many key corn states are well behind their traditional benchmarks.

The USDA has disappointed a lot of people with its recent WASDE report, which indicated an increase in total acreage and harvest potential. But traders were left scratching their heads when the agency left yield expectations unchanged.

Tregg Cronin at Halo Commodity Company told Agrimoney earlier today that he expects that yields to fall into a range of 160 bushels per acre to 167 bushels per acre.

Concerns about weather come at a time that the corn crop is entering a critical pollination phase. Allendale notes that the highest pollination gains have been seen in Iowa, Minnesota, South Dakota, and North Dakota. In Missouri, just 11% of corn is pollinated.

On the international front, Brazilian corn exports topped 820,000 metric tonnes through the first half of July, a 65% jump from last year.

Soybeans Prices Get Weather Bump

Soybean prices also pushed higher thanks to the warmer weather expected in the week ahead.

The August futures contract jumped 4.5 cents to finish the day at $9.89. The November futures contract added 4.25 cents to finish just above $10.01.

Markets were digesting the weekly crop progress report that showed soybean quality declining yet again. Ratings for the U.S. crop fell 1% to 61% good-to-excellent 62% last week.

That figure is down from 71% last year.

The good news for the crop is that 52% of soybeans are blooming as of Sunday, with 16% setting pods. Both of those numbers are higher than average.

Producers are not facing a bit of a crunch on time. There will be a lot of supply hitting the markets in the coming weeks – in addition to heightened expectations for the size of the South American crop. Moving old crop should be a priority.

Wheat Prices Waffle

Winter wheat prices slipped on the day to $5.03 per bushel in Chicago.

Meanwhile, the September Minneapolis spring wheat contract pushed up to $7.80 per bushel, 13 cents on the day. Traders are anticipating a slight downturn in North American production. Also, the crop has reached the point where more rain isn’t going to help improve yields.

With dry weather affecting crop quality across the nation, the demand for higher protein quality is on the rise. [For more on that topic, be sure to check out our Winter Wheat Conditions Update, which covers the state of the crop and critical importance of grain testing, right here.]

On the global front, Egypt’s GASC announced the purchase of 300,000 metric tonnes of wheat in their tender offer. The country will buy 120,000 MT Romania and 120,000 MT from Russia. The balance will be purchased from France.

Meanwhile, a new report indicates that Russia’s wheat production will be larger than previously expected. The numbers follow news from the most recent report from the USDA’s Foreign Agricultural Service. Russian wheat production has seen a 3.0% bump in production for 2017/2018. That offsets declines in the United States (-1.75%), Australia (-1.5%), Ukraine (-1.0%), and China (-1.0%).

The USDA has projected that global wheat production will decline by 1.7 million metric tonnes from last month’s estimates.

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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