September 1 – Corn Prices Start September in the Red

I’m sitting down on Wells and Jackson a block away from the Chicago Board of Trade.

Everyone has largely cleared out, and the tourists are starting to pile into the city for Labor Day weekend.

Before someone turns on the drinking lamp for this town, here’s our daily recap from the Chicago Board of Trade.

Corn Prices Start September in the Red

Corn prices were falling Friday. The September contract shed 2.25 cents and closed at $3.40.

The December contract dropped 2.5 cents and closed a tick above $3.55.

Our friends at AgChieve offer a glimpse into what has been happening in the corn markets over the last few weeks. Last year, we saw an uptick in corn futures during the first week of September.

AgChieve asks an important question: Will history repeat itself.

Today, we read a series of estimates for final corn yields.

Among them was INTL FCStone. Analysts there projected 166.7 bushels per acre.

Meanwhile, Informa set a new estimate of 169.2 bpa.

This is going to be interesting. Both figures are below the USDA’s August estimate of 169.5.

We’ll know more in the next two weeks. ay 18 Corn is at $3.73 3/4, down 4 cents

Soybean Prices Push Higher

Soybean prices were on the rise Friday. The September contract added 5.75 cents to close the day at $4.72. The November contract added 4.25 cents to close at $9.495.

The USDA crush report showed that 155.61 million bushels were crushed in July. That figure is about  5% jump from the previous month. It’s also a 1.5% increase from the same time last year.

We were also reading into new surveys on yield. After last week’s crop tour offered a glimpse into what to expect by the end of the year, we also saw Allendale, INTL FCStone and Informa set their estimates.

  • Allendale’s survey: 47.1 bushels per acre
  • INTL FCStone: 49.8 bushels per acre.
  • Informa (according to BRUG): 49.4 bushels per acre.

Wheat Prices Gain in Chicago, Slide in Minneapolis

In Chicago, wheat futures were on the rise. The September contract popped 10.25 cents and closed above $4.20. The December contract added 4.25 cents and finished the day above $4.38.

Down in Kansas City, the hard red wheat contract for September added 3.75 cents to close the day at $4.125. The December contract added 2.5 cents to close just below $4.39.

Up in Minneapolis, the spring wheat contract was falling. The September contract shed 6.5 cents to close at $6.12. The December contract dipped 8.75 cents to finish under $6.32

We’re going to have to wait until Tuesday to get the USDA’s weekly crop progress and quality report.

On Monday, we noted that we’re about three quarters through the spring wheat harvest. At this time, most predictions have U.S. production below what the USDA said in early August.

We’ll have to wait another two weeks for the next WASDE report, but speculators are already on the move and

covering their short positions. That’s not surprising though as we start a new month and we’re not far away from the September contract expiration.

As Brennan explained earlier this week, the Gulf Coast is responsible for a significant share of U.S. exports. While Hurricane Harvey pummeled the U.S. refinery network and knocked capacity for oil refining by 20%, the ports are trying to get up and running as quickly as possible.

Now, that doesn’t mean that we’re not going to see some ports struggle. The weather system is still hovering in the region, and there’s new fear that Tropical Storm Irma is going to take aim at the Gulf as a potential category 5. That could be — and is likely – media hype right now. But anyone glancing at the cone and models know that anything is possible right now.

Earlier today, Brennan and I were talking about the stories that we’re going to be exploring as we head into the fall. (Please advise: Grain Markets Today will run all next week, but our next Insights article after tomorrow won’t be until next Saturday. We’ve got some exciting plans for our readers about how we can help them get the best price for their grain in the future.)

Anyway, as I was saying, during the conversation, Brennan suggested a headline about Russia that isn’t church language, but it’s certainly accurate. The wheat markets have been declining thanks to Russia’s monster production figures and then their insistence in selling grain lower than their international competitors.

Today, Russia’s IKAR increased its national wheat production estimate by 3 million metric tonnes to 84 million metric tonnes. They also set an export range of 31 million to 33 million metric tonnes.

It’s their prerogative and they are the largest producer of wheat in the world. Canada, the EU, and Australia are all stuck in neutral thanks to drought and smaller crops.

Still, I’m sure that wheat farmers up in the northern Plains, farmers who have endured a blistering summer and drought – and now looking at the market and screaming “Really?!”

On Tap Saturday

As I mentioned in my recap from the Farm Progress showdown Decatur this week, we’re going to be turning our attention to last month’s performance in the grain markets.

Look for a recap from our editorial team tomorrow morning, and check back next week for more insight into the global grain markets. In addition, we’re going to be putting together something really special for our readers.

Keep an eye on Farmlead Insights starting on September 12. You don’t want to miss this…

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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