June 11: Soybean Prices Fall Ahead of June WASDE Report

Soybean prices cratered yet again on Monday as markets prepared for tomorrow’s WASDE report. Let’s jump into grain prices at the Chicago Board of Trade and review expectations for the June WASDE report.

Corn Prices Slump

July corn prices plunged 10.5 cents to close the day a tick above $3.67. The September contract shed 10.25 cents to end the day just above $3.76 per bushel. Over the weekend, a lot of rain hit the Corn Belt and pushed expectations for the new corn crop even higher.

This afternoon, the USDA released its weekly crop progress report. The agency said that 94% of the U.S. corn crop has emerged. That figure is two points higher than the 5-year average. The USDA also said that 77% of the U.S. corn crop was rated good-to-excellent (G/E). That figure was a 2-point dip from last week’s report. The chart below provides a glimpse of U.S. corn conditions.

Corn Crop Condition- US

This morning, the USDA also announced that U.S. export inspections for the week ending June 7 came in at 1.41 MMT. That figure was a 31% pop from the same period last year.
According to trade estimates, for 2017/18, U.S. corn ending stocks are expected to come in at 2.166 billion bushels, down 16 million bushels (or mbu) from the May report.

For next year, the average estimate for American corn ending stocks is 1.663 billion, down 19 mbu from the previous report.

The average estimate for Argentine corn is 32.5 MMT (down about 470,000 MT from May) and for 84.5 MMT in Brazil (down 2.5 MMT from last month).

Global corn ending stocks of 2017/18 are forecast to come through at 193.4 MMT. That would represent a roughly 1.5 MMT cut from last month’s number of 194.85 MMT.
For the 2018/19 new year crop, the average pre-report estimate from analysts is 157.56 MMT. That figure would represent a similar cut from the May estimate of 159.15 MMT.

Wheat Prices Dip Ahead of WASDE Report

Falling corn prices hit the wheat complex as traders sold off ahead of the WASDE report. Markets largely ignored news that Russia’s SovEcon cut its forecast for 2018/19 Russian wheat crop production by 3.9 MMT to 73.1 MMT.

In Chicago, July SRW contracts shed 5.5 cents to close the day at $5.145. The September contract shed 6 cents to end the day just under $5.31.

In Kansas City, the HRW contract for July closed the day just under $5.35. The September contract ended the day at $5.50 after a 5.25-cent decline.

This morning, the USDA said that wheat export inspections came in at 369,969 MT for the week ending June 7.

This afternoon, the USDA released its weekly crop progress report. The agency said that 38% of the U.S winter wheat crop was rated G/E. That number represented a 1-point jump from the previous week.

Winter Wheat Crop Condition- US

The agency also said that 14% of the winter wheat crop has been harvested. That is 4 points ahead of the five-year average.

Winter Wheat Harvest Progress - US

On Tuesday, the USDA will release its monthly WASDE report. Trade expectations call for a slight uptick in 2018/19 American wheat production. The average estimate called for production at 1.822 billion bushels, up about 10 million bushels from last month.

Of this figure, the trade is looking for 1.19 billion bushels of American winter wheat production.

Projected U.S. ending stocks for the 2017/18 all wheat sit at 1.08 billion bushels and 958 mbu for 2018/19.

The 2017/18 ending stocks pre-report estimate is up slightly from the 1.07 billion bushels reported last month.

Global ending stocks of 2017/18 are forecast to come through at 267 MMT in wheat. That figure is down slightly from the 270.5 MMT reported last month.

In Minneapolis, spring wheat prices dipped 2.75 cents to close the day under $5.90. The September contract shed 2.5 cents to end the day at $6.015.

Spring Wheat Crop Condition- US

Soybean Prices Crater Once Again

Weekend rain bolstered crop expectations for the U.S. soybean crop. Markets are still jittery about ongoing trade tensions between the U.S. and China.

In Chicago, soybean prices plunged 15.5 cents to close the day just under $9.54. The August contract shed 15.75 cents to end the day at $9.59.

This morning, the USDA said that export inspections came in at 644,327 MT. This figure was up more than 12% from the previous week, and about a 26% jump from the same time last year.

The USDA also reported today that 93% of the U.S. soybean crop has been planted. That is an 8-point jump over the five-year average.

Soybean Planting Progress - US

Meanwhile, the agency said that 74% of the soybean crop was rated G-E. That is a one-point dip from last week’s report. However, it is 8 points ahead of the five-year average.

Soybean Crop Condition US

Finally, let’s turn our attention to the WASDE report tomorrow.

For 2017/18, analysts expect that U.S soybean ending stocks will come in at 522 million bushels (mbu), down 8 mbu from the May report.

For the 2018/19 crop year, the average estimate for US carryout is 417 million bushels, up 2 mbu from the May report.

Thinking more global, the average pre-report estimate for 2017/18 soybean ending stocks is 91.35 MMT. For the new crop year, the average estimate sits at 86.74 MMT of soybeans.

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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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