October 2 – Corn and Soybeans Prices Slide Across the Board

Grain traders were keeping an eye on the weather again Monday as the harvest continues across the country for corn and soybeans. But it wasn’t just the expected rains later this week across the Midwest that captured our attention. Down in Brazil, a dry spell is expected for the next week as farmers in the region get started to planting season.

Across the board, corn prices, soybean prices, and wheat prices fell Monday. Here is our daily recap from the Chicago Board of Trade.

Corn Prices Dip, USDA Reports Uptick in Quality

In Chicago, the December corn futures contract dipped 3.75 cents to finish at $3.515. The March contract was off 3.5 cents and closed at $3.6425. Some traders were taking profits off the table after Friday’s slight bump. The Commitment of Traders reported last week that managed money had slightly reduced its net-short position, but it was hardly enough to generate a significant swing in optimism for corn prices.

It was a pretty dull day for traders today as we parsed through some export data that suggests it could be a tough start to the 2017/2018 quarter. For the week ending Sept. 28, corn export inspections totaled a little more than 728,000 metric tonnes. The figure was a bit higher than the previous week, but almost a 50% decline from the same period last year.

At a time that the U.S. is trying to renegotiate NAFTA with its trade partners, every deal with Mexico will be under the microscope. Today, the USDA announced a private export sale of nearly 600,000 metric tonnes to its southern neighbor.

This afternoon, the USDA also reported the progress of the corn harvest. The agency said that just 17% through Oct. 1. That is well behind the five-year average of 26%. We can blame the broader maturity level, which came in at 68%. The five-year average for maturity at this stage sits at 78%.

If markets were looking for one more bearish factor today, they found it in the condition figure for the crop. The USDA hiked its crop rating for good-to-excellent corn from 61% to 63%.

Soybean Slide, Exports Lag Last Year’s Output

The November soybeans contract shed 11 points to closed the day a tick above $9.57. The January contract fell 10.75 points to finish the day under $9.68.

Once again, the data showed that U.S. exports are lagging last year’s performance. The 894,250 metric tonnes marked for shipment last week was about 19.5% behind the same period last year.

It appeared that some traders were taking profits off the table in the wake of Friday’s bullish ending stocks report.

This afternoon, the USDA reported crushing figures for the month of August.  The crush figure came in at 4.55 million metric tonnes (152.2 million bushels). That figure was a slight decline from the 4.67 million metric tonnes in July.

The soybean harvest came in at 22% complete for the week. Farmers were very busy cutting soybeans as the harvest increased 12 percentage points from the Sept. 24 reading. The progress is still behind the 26% completion average over the last five years.

Finally, the USDA maintained its crop quality rating for soybeans at 60% good-to-excellent.

Spring Wheat Prices Slump Again

In Chicago, the December SRW contract shed 3.5 cents to finished under $4.45. The March 2018 SRW contract dipped 3.25 cents to close at $4.6325.

Down in Kansas City, Hard Red Wheat contracts slid as well. We saw the December contract fall 3.5 cents to close at $4.3925. The March contract slipped 3.5 cents to finished under $4.57.

Finally, spring wheat contracts took a bit of a bath today. The December MGEX contract for spring wheat shed 12.25 cents to finish at $6.115. The March 2018 contract dipped 12 cents to finish the day at $6.25.

Markets barely acknowledged news that managed money has shed its short position again. The CFTC reported managers with a net-short position of -66,699 as of last Tuesday. Managers cut their position by 14,869 contracts last week.

This afternoon, the USDA said that 36% of winter wheat has been planted. That figure trails the 43% average over the last five years.

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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