April 13: Profit Taking Hits Grain Prices in Chicago

Profit-taking hit grain prices on Friday in addition to rainy forecasts across the Midwest.

Markets continue to monitor the ongoing trade spat between China and the United States and the political tensions surrounding Syria. Ongoing uncertainty pushed oil prices to three-year highs. How did those factors and others impact grain prices?

We answer that and more in our daily recap of grain trading in Chicago.

Wheat Prices Slide on Wet Forecasts

Wet weather and increased export expectations out of Russia rattled wheat prices Friday. Forecasts show that rain will hit the Plains this week, offering hard red winter wheat acres a needed drink.

SRW wheat prices in Chicago slipped 8.5 cents to close the day at $4.725. The July contract shed 9 cents to end just above $4.89.

In Kansas City, the May contract shed 11.75 cents to end the day just under $4.96 per bushel. The July contract dropped 11 cents to close the day just under $5.15.

In Minneapolis, the MGEX spring wheat contract shed 6 cents to end the day at $6.17. The July contract was off 5.75 cents to end the day just under $6.27.

Russia will continue to flood the global markets with 12.5% wheat. It’s a topic that we’ve discussed regularly at GrainCents. IKAR hiked its export projections for Russia to 39.5 MMT. Russia has remained a critical threat to rivals like the United States, Canada, and Australia when it comes to global market share. Even though the U.S. has hit Russia with economic sanctions, exports remain robust and a falling Ruble has benefited wheat shipments along the Black Sea.

Finally, the Commitment of Traders report showed that managed money cut its net short position on Chicago wheat by more than 18,500 contracts.

Speculators now remain short -54,872 contracts.

Corn Prices Retreat

Hedge funds hiked their long position on corn contracts in the weekly Commitment of Traders report. But that level of support wouldn’t factor into Friday’s small decline in corn contracts. In Chicago, May corn prices shed 2.5 cents to end the day a tick above $3.86. The July contract was off 2.75 cents to close the day at $3.945.

Global markets closely eyed a big sale of reserves by the Chinese government. The country has been unloading a lot of old corn (2013). Meanwhile, markets are well aware that the USDA has not announced a large export sale since April 6.

The CFTC showed that spec funds added another 34,700 contracts to their long position this week.

Meanwhile, we received an update on the state of the corn harvest down in South America.

AgRural said Friday that Brazil’s first crop harvest is now 72% complete. Farmers have been catching up, but this figure still lags the average of 75%. Argentina’s Ag Ministry said that the country’s corn harvest is now 31% complete. The five-year average is 25%.

Soybean Prices Dip

May soybean contracts shed 6.5 cents to close the day above $10.54. The July contract dropped 6.75 cents to finish at $10.65.

Down in Argentina, the nation’s soybean harvest is 28% complete, which topped the five-year average. Meanwhile, the soybean harvest in Brazil is now 85% complete.

On Monday, we’ll get the monthly NOPA update on crushing. Analysts project that the March crush will come in at 168.3 million bushels. That would be a 10% increase from last year.

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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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