January 19: March Soybean Prices End Week Above $9.77

Soybean prices closed the week out strong Friday. Rains across Brazil have delayed the harvest in key producing regions. That has added some short-term support to the crop.

Traders also dismissed concerns about the looming government shutdown in Washington.

As of today’s editorial deadline, the Senate had made no progress on bringing a vote to the floor on a stop-gap budget to keep the lights on.

Previous shutdowns have not had a major impact on grain prices, though we might be a bit in the dark on certain reports in the near-term.

Here’s more on today’s session at the Chicago Board of Trade.

Soybean Prices Push Higher  

It was a good day for soybean farmers as prices pushed higher for the fifth-straight day. As I noted above, harvest delays in Brazil will offer a short-term boost to U.S. crop demand.

Soybean cash prices in Chicago hit $9.39 after added 8 cents. That’s the highest closing cash soybean price since mid-December.

March soybean prices added 4.25 cents to close the day a tick above $9.77. The May contract added 4.25 cents and closed at $9.885.

We saw some critical numbers on crop quality down in Argentina. As I noted in GrainCents today, the USDA isn’t ready to downgrade the size of the crop yet. We’ve already seen some of the locals make cuts.

Now, the Buenos Aires Grain Exchange (BAGE) issued a pretty ominous quality report.

BAGE says that just 37.3% of the crop is rated good-to-excellent. Last year, this time, the figure was 52.6%.

While there has been no shortage of cuts to crop expectations out of Argentina, harvest expectations are picking up in Brazil. We’re starting to hear chatter about another record harvest, which is good news for China, but bad news for everyone growing.

Harvest progress in Mato Grosso sits at 3.3%, according to the Brugler Report.

That’s behind the 11.5% pace from last year and the five-year average of 7.2%.

The big news today though was the USDA export figures. The numbers were pretty good. Old crop sales came in at 1.24 MMT. That figure topped the high-end range of trade estimates at 1 million MT. New crop shipments came in at more than 287,000 MT.

China purchased nearly half of those old crop shipments (at 576,600 MT). Mexico was second.

Up to Winnipeg, Canola prices followed soybean prices higher. March 2018 canola prices added CAD $3.40 to finish at CAD $496.00. May canola prices added CAD $2.80 to close at $502.80. As our friends at AgChieve explain in the chart below, March canola prices have been hovering below a key resistance level of CAD $500 for a few weeks.

Should we see the price break CAD $500 next week, it could spark a buying frenzy.


Wheat Prices Wilt on Friday 

Wheat couldn’t keep up with soybean prices Friday.

We saw price declines in Chicago, Kansas City, and Minneapolis.

The reason: Weak export sales.

March SRW contracts shed 2.5 cents to close the day a tick under $4.23 per bushel. May contracts shed 2.75 cents and finished at $4.355.

In Kansas City, March HRW fell 2 cents to close at $4.275. May contracts shed 1.75 cents and finished just above $4.41.

Minneapolis March spring wheat contracts dipped 2 cents and closed at $6.065. May contracts shed 2.25 cents and finished at $6.175.

The USDA report indicated that wheat sales came in at a paltry 153,115 MT. Japan bought roughly 97.200 MT of the total.

The agency also reported new crop sales of 37,500 MT. That brings 2018/19 sales to 241,252 MT.

Corn Prices Show Small Gains 

The action wasn’t that exciting in the corn complex today. Cash prices dipped 1.5 cents to close at $3.49. That’s just 3.5 cents shy of where March futures contracts are sitting right now.

At first, it’s unclear what exactly traders were doing today. There was plenty of bullish news that seems to have gone ignored.

First, the USDA announced that old crop sales were just on fire last week. All said, the US shipped 1.888 MTT of old crop. The high end of trade estimates was 800,000 MMT.

But that’s not all… if you think the Argentina soybean crop looks bad, take a look at this corn crop rating by the BAGE. The exchange says that just 12% of the early corn crop is rated G-E.

Meanwhile, 44.9%… 44.9%… 44.9% of the crop is rated poor/very poor.

If you’re wondering why no one is paying attention, look no further than China.

As I noted in GrainCents today, the size of China’s corn reserves have gotten out of hand. It’s why the International Grains Council hiked its stocks expectations by 50% yesterday.

Next week, we’re going to dive more into events happening in South America. With more data circling the jet streams, we will pull it down and help you make sense of how and when to sell your crops in 2018.

Enjoy the weekend.

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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