March 1: Weather Rally Pumps Winter Wheat Prices Higher

Winter wheat prices surged again Thursday.

A weather rally continued to press prices higher thanks to ongoing concerns about dryness in the U.S. Plains and Argentina.

Meanwhile, we saw corn prices get a nice little 1% pop thanks to stronger than expected export figures.

Markets started the month of March with a lot of momentum.

Here’s our daily recap from the Chicago Board of Trade.

Corn Prices Gain 1% on the Day

On the corn front, the grain couldn’t keep up with its other rivals on the board today.

The May corn contract added 4.25 cents to close the day a tick above $3.86.

Corn prices ticked slightly higher thanks to a strong exports report. The USDA reported that total sales for the week came in at 1.753 MMT. Japan was the largest buyer at 514,500 MT.

Mexico purchased 217,300 MT.

While total crop output in Argentina has been a topic here all week, today we have to turn our attention to analyst updates out of neighboring Brazil. Today, INTL FCStone said that it projects that the country’s first corn crop will come in at 23.4 MMT. That’s a downward revision of about 470,000 MT from its previous estimate.

Meanwhile, the analysts say that the second crop will come by 420,000 MMT to about 62.38 MMT. Total output is slated at 86.2 MMT.

We’ll find out just how close they are to the mark when the USDA reports the March WASDE report later next week.

May Soybean Prices Hit $10.68

Soybean prices again popped more than double digits as worries about Argentina’s drought continue to drive speculators into bullish positions. The May contract in Chicago added 12.5 cents to close the day at $10.68 per bushel.

We did see a few large sales of soybeans on the global market. Today, the USDA reported a sale of 126,000 MT to unknown destinations and another 120,000 MT to China.

Total export sales for last week came in at roughly 858,000 MT. That was nearly two times larger than the same period last year.

Winter Wheat Prices Surge

We’ve seen winter wheat contracts add more than 40 cents since Monday.

The ongoing rally has been spurred by significant concerns about the state of the crop. In addition, the lack of rain across the Plains has speculators pressing prices even higher. The US Drought Monitor against indicated an uptick in dryness across key producing regions in Texas, Oklahoma, and Kansas.

In Chicago, ­SRW wheat prices for May gained 20.5 cents to close at $5.155 per bushel.

In Kansas City, May HRW contracts added 21.25 cents to close the day at $5.435.

In Minneapolis, spring wheat contracts for May gained 13 cents to close just under $6.35.

The surge came despite somewhat lackluster export numbers last week. The USDA reported weekly export sales of 191,122 MT. That was a 41% drop from the previous week. However, the number was in line with the same period last year.

The largest buyer of U.S. wheat was Mexico at just under 85,000 MT.

Markets were also keeping a close eye on South Africa. Ongoing drought conditions have fueled speculation that the nation may need to double imports this year as its domestic production slumps by as much as 50% across the country.

The Dow Jones Plunges Again

In New York, oil prices ticked lower thanks to an uptick in U.S. inventory levels.

Meanwhile, the Dow Jones cratered again Thursday. Markets are increasingly concerned about the potential for four interest rate hikes in 2018. Today, Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee. Powell has said that the central bank must continue to raise interest rates in order to stave off inflation.

Sign Up for the Breakfast Brief

Looking for daily content on the U.S. and Canadian grain markets?

Be sure to sign up the daily Breakfast Brief. Each morning, FarmLead co-founder and CEO Brennan Turner takes you insight the numbers to break down what is moving grain prices across the continent.

We’re not just talking exchanges in Chicago and Winnipeg.

We’re talking about local prices on some commodities with limited price transparency.

Sign up for the Breakfast Brief right here. 

It’s free and delivered to your inbox every morning.

 

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.

Most Recent Posts
May 24 - Corn, Wheat Prices Earning a Weather Premium
May 24, 2019 Brennan Turner
Grain prices this morning are all in the green, led by corn and wheat prices, as a weather market continues to materialize in the complex.
October 4: Corn Prices Edge Higher With October WASDE in Focus
October 04, 2018 Garrett Baldwin
Corn prices ticked higher Thursday as traders and analysts began to speculate on next week’s release of the October WASDE report.
Accounting for Weather Ahead of Corn & Soybean Plant 2019
March 18, 2019 Brennan Turner
While the trade war is still grabbing a lot of headlines, it's the recent volatile weather that is starting to help grain prices improve.