June 4 – Trade War Tantrum Hits Soybean Prices

Grain prices started the week deep in the red thanks to ongoing concerns about Chinese-U.S. trade relations and the wave of favorable weather across the United States. Improving forecasts pulled wheat prices down more than 3%, while soybean prices slumped after trade discussions between the world’s two largest economies offered little progress.

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

Soybean Prices Slump

It doesn’t appear that the United States was able to make much progress in conversations with China. The lack of progress has markets increasingly concerned that China will restart chatter about tariffs on U.S. soybean cargoes.

On the trade side, the USDA said that export Inspections of soybeans came in at 20.5 million bushels (557,733 MT). That figure was down from last week, but 94% higher than the same period in 2017.

This afternoon, the July 2018 soybean contract fell 19.5 cents to pennies above $10.00 per bushel. Meanwhile, the August contract shed 19.25 cents to end the day just under $10.07.

Today the USDA reported a new crop cargo of 4.2 million bushels (114,000 MT) to Mexico. This is a positive development given that the U.S. is also engaged in trade disputes with its NAFTA partner.

The USDA reported today that 87% of the soybean crop has been planted. That figure was 2 points shy of analysts’ expectations. The figure is 12 points ahead of the five-year average.

Soybean Planting Progress

The USDA also reported its first grading of soybeans across the U.S. The agency said that 75% of the crop is rated G/E.

Corn Prices Retreats

Corn prices took a punch on Monday.

The U.S. corn crop is looking quite strong thanks to recent rains and warmer temperatures. As we noted over the weekend, some farmers are pleased that they’re seeing knee-high corn to start the month.

Improving weather offset optimistic numbers from the European Commission. The EC cut its forecast for European corn production by roughly 40 million bushels. They also hiked their import projections for 2017/18 from 590.5 million bushels to 645.6 million bushels.

This afternoon, the USDA released its weekly update on corn progress and quality. The markets anticipated that planting would come in 97% complete, while 79% of the crop would be rated “good to excellent” (G/E). Here’s a recap of what the USDA reported.

Analysts were right in their expectations on planting. The 97% figure was 2 points ahead of last year’s pace and the five-year average. The agency says that 86% of the crop has emerged, three points ahead of the five-year average.

Corn Planting Crop Progress

On the conditions side, the USDA said that 78% of the crop was rated G/E. That figure is a point back from last week’s number and 10 points ahead of the crop grade during the same period last year.

Corn Crop Condition

Weather Weighs on Winter Wheat

Today produced a significant selloff in the wheat complex. The July SRW contract fell 18 cents to close the day a tick above $5.05. The September contract shed 18 cents and closed the day just under $5.23.

In Kansas City, the HRW contract for July dropped 17.75 cents and closed at $5.23. The September contract shed 18.5 cents and closed the day at $5.405.

Up in Minneapolis, July spring wheat contracts shed 10.75 cents to end at $5.95. The September contract shed 10.25 cents and ended the day at $6.025.

This afternoon, the USDA reported weekly crop progress. Analysts projected that just 38% of the winter wheat crop would be graded G/E. Here’s what the agency had to say.

Winter Wheat Crop Condition

The USDA said that 5% of the winter wheat crop has been harvested. The agency also said that just 37% of the crop was graded G/E. That figure is 12 points back of the crop grade during the same period in 2017.

Spring wheat planting came in at 97%. This figure is 3 points ahead of the five-year average. The agency also said that 70% of the spring wheat crop is rated G/E. That number is 15 points ahead of last year’s figure.

USDA also reported that 63% of the U.S. spring wheat has emerged. That number is 5 points shy of the five-year average at 68%.

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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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