June 13: Post-WASDE Slump Hammers Soybean Prices

A brutal selloff hit key parts of the grain markets on Wednesday. Wheat and soybean prices both fell sharply in Chicago as investors shrugged off bullish sentiment and turned back to earlier bearish factors that had hit the complex ahead of the June WASDE report.

Let’s take a look at prices at the Chicago Board of Trade.

Soybeans in Full Retreat

July soybean prices fell 18 cents to end just below $9.36 per bushel. August contracts fell 17.75 cents to end just under $9.42. Markets are increasingly concerned about the U.S. and it’s proposed plan to hit China with tariffs on $50 billion in Chinese goods. We’re anticipating some update from the Trump administration on Friday.

This has been an interesting week on the trade front. While President Trump traveled to Singapore to discuss a deal with North Korea over its nuclear arsenal, the president’s top economic adviser Larry Kudlow suffered a heart attack. Kudlow survived, but he has been the only consistent voice supporting free trade in the President’s ear.

Meanwhile, Trump’s other advisor – Peter Navarro is a protectionist who has an economic philosophy locked in the 17th century. He was responsible for a pretty vile comment about Canadian Prime Minister Justin Trudeau earlier this week.

It’s unclear what is going to happen, but the markets are now anticipating the worst.

On the exports front, the USDA reported a private export sale of 177,000 MT (5,000 for 1/18 and 172,000 for 18/91) to unknown destinations.

Meanwhile, Informa Economics projected total U.S. soybean acreage of 89.902 million acres. That figure is 920,000 acres higher than the USDA Prospective Plantings report.

Wheat Prices Crater in Chicago

July SRW wheat contracts in Chicago fell 18 cents to close the day at $5.185. The September contract dropped 17.25 cents to close the day just under $5.33.

In Kansas City, July contracts shed 14.5 cents to close the day at $5.39 per share. The September contract shed 13 cents to close the day $5.55.

July spring wheat contracts in Minneapolis fell 8 cents to close the day at $5.845 per bushel. The September contract fell 7.25 cents to close the day just above $5.97.

Markets didn’t seem too impressed by the 10 mbu cut in old crop stocks in the June WASDE report.

Today, Informa Economics reported that spring wheat acreage would come in at 12.177 million acres. That was a cut from the 12.267 million acres from the March intentions report.

Corn Prices Hold Despite Market Selloff

July corn contracts were off slightly in Chicago on Wednesday. The corn contract shed 1.5 cents to end the day at $3.76 per bushel. September corn contracts fell 1.25 cents at $3.855.

Today, the Energy Information Administration was positive again this week. The U.S. averaged 1.053 million barrels per day. That was an uptick of 12,000 bpd from the week prior.

Today, Informa Economics released its monthly update on corn acreage. The group projects that U.S. acreage will come in at 88.706 million acres. That number is about 680,000 acres higher than the March Planting intentions report.

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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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