October 4 – Wheat Prices Retreat Again

Grain markets were on the decline during a grey day in Chicago. Markets were eyeing weather reports and hoping that rain across the Midwest would alleviate some dryness across the Dakota, Iowa, and Illinois.

With rain in the forecast, markets are expecting additional delays into a harvest that is already well behind five-year average for corn and soybeans.

Here’s more on daily trading at the Chicago Board of Trade.

Corn Prices Drop With WASDE in Focus

In Chicago, the December corn contract fell 1.25 cents to close just above $3.48. The March contract dropped a penny to finish at $3.6125. Corn contracts for December are now hovering near a 52-week low as markets look toward next week’s WASDE report.

While traders are starting to firm their expectations for corn’s yield figure, we will first have to dig through the weekly export report tomorrow. Expectations among analysts call for the U.S. to have shipped more corn than the 12.6 million bushels exported in the previous week.

Soybeans Show Gains

Soybean contracts were rising in Chicago thanks to technical traders coming in and offering some support. Dryness in Brazil offered some bullish sentiment.

The November contract added 3 cents to finish the day at $9.5825. The January contract added 2.75 cents to close a tick below $9.69.

Markets are eyeing tomorrow’s export figures, although we’ve already seen two large deals pass through the system this week. It will be hard to top the Sept. 21 report, which showed total soybean exports of 114 million bushels for the week.

With WASDE in focus, INTL FCStone hiked its forecast for soybean yield expectations. The brokerage projects 49.9 bushels per acre. That figure is in line with the USDA report last month and was an increase from the firm’s previous forecast of 49.8.

[Note: INTL FCStone also increased its corn yield forecast from 166.9 bushels per acre to 169.2 bushels per acre.]

Meanwhile, Lanworth increased its forecast by a half-bushel to 49.3 bushels per acre. [1] The firm set a very aggressive projection for corn at 171.3 bushels per acre.

Once again, we’re eyeing bearish data out of Brazil. The country is expected to produce nearly 4 billion bushels this year and export about 59.5% of the crop. Brazil’s bearish export goals show that farmers are simply not afraid of selling into a market where U.S. soy production is swelling.

Wheat Prices Dip Again Across U.S.

Rains across the Great Plains weighed on wheat prices this afternoon. While dry conditions have slowed planting of Winter Wheat in Montana and other parts of the plains, traders have also been distracted by conditions abroad. While rain has battered Argentina, dry conditions are affecting the crop in Eastern Europe and Australia.

In Chicago, SRW December contracts shed 5.75 cents to close at $4.42. The March SRW contract dipped 5 cents to finish at $4.605.

In Kansas City, the HRW December contract fell 5.75 cents and ended trading at $5.36. The March contract fell 5.5 cents to close under $4.54.

Spring wheat contracts also shed a few cents. The MGEX December contract for spring wheat fell 2.25 cents and closed at $6.10. The March contract slid 2.5 cents to finish the day at $6.235.

Prices are facing pressure again due to Russia’s record wheat harvest and proximity to high-demand markets. Traders were still weighing Egypt’s latest purchase of Russian wheat from Tuesday.

A light day of economic data failed to offer much direction for traders. Tomorrow, the USDA export report will be in focus. According to analysts, wheat exports will fall between 11.0 million bushels and 18.5 million bushels.

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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