July 3: Wheat Prices Claw Back Gains on Tuesday

Wheat prices clawed back some gains Tuesday before the July 4th Holiday.

Buyers stepped in to find bargains on wheat contracts in Kansas City and Chicago. Meanwhile, ongoing concerns about a trade war between the United States and China (and a few other trade partners) weighted on soybean prices. Neither China nor the U.S. is expected to step back from the brink before tariffs go into effect this Friday.

Let’s take a look at what happened today at the Chicago Board of Trade, which closed early in advance of tomorrow’s holiday.

Wheat Prices Find Gains

In Chicago, September SRW contracts added 10.75 cents to close the day at $4.91 per bushel. The December contract added 9.75 cents to close at $5.065.

In K.C., September HRW contracts added 13.25 cents to close just above $4.84. Ongoing weakness in the Russian crop continues to put Chicago contracts at a premium to K.C. wheat.

September spring wheat contracts added 8.25 cents to end the day just above $8.25.

Yesterday’s crop progress report showed that 58% of the spring wheat crop is headed. That is well ahead of the five-year average of 48%.

Keep in mind that the U.S. markets will be closed tomorrow for the July Fourth Holiday.

Soybean Prices in Reverse Again

Another day, another downer for soybean prices. The August contract shed 5.5 cents to end the day at $8.48. September contracts shed 5.25 cents to end the day just under $8.54.

Traders continue to raise alarms around the ongoing trade spat between the United States and China.

The ongoing tensions overshadowed yesterday’s crop progress report, which indicated a small dip in quality conditions. China said it can “win big battles” and took a shot at U.S. culture with a travel warning to its own citizens. China warned nationals about traveling to the United States due to high healthcare costs and violent crime.

With that in mind, new data over Chinese trade indicated that tariff talk is already showing up in the numbers. According to China’s customs agencies, June export growth to the U.S. slowed by a significant amount.

In June, Chinese trade to the U.S. increased by just 3.8%. That figure is 23.8 percentage points lower than the growth rate witnessed in 2017.

Corn Prices Kick Higher

The corn trade saw gains. The September contract traded above that all-important $3.50 level and gained 5 cents on the day. The December contract added 5.25 cents to close just above $3.64. Traders increased their sentiment slightly after the USDA reported that 76% of the crop is rated G/E. That figure was a 1-point drop from the previous week.

The more bullish sentiment came on news that U.S. export levels are poised to increase later this year. Ongoing dryness across Europe and the Black Sea have complemented smaller crops in Brazil and Argentina.

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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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