September 19 – StatsCan Pulls Grain Prices Lower

Grain prices were mostly in the red Tuesday, but no major surprises could be found as seasonal harvest pressures continue to affect sentiment.

The broader markets have been taking a wait-and-see approach to global asset prices as the Federal Reserve prepares to conclude its September meeting tomorrow.

Wheat prices were mixed, while soybeans and corn saw modest losses. Monday’s NASS crop quality and progress report offered little reason for traders to be bullish, while fund managers continued to hold short positions across the complex.

On a gray day here in Chicago, let’s take a few minutes to recap trading at the Board of Trade.

Corn Prices Dip after Progress Report

The December 2017 corn futures contract shed 3.25 cents to close the day a tick above $3.48. The March 2018 contract also dropped 3.25 cents to finish the day just under $3.61 per bushel.

As we noted yesterday, the number of states gaining in the good-to-excellent quality marks outpaced the number of state with declining quality. That said, the figure showed no change in total G-E rated crops.

No alarms and no surprises came in Monday’s report, but we did confirm that the harvest progress across the Midwest is lagging its five-year averages. It’s not enough to cause any panic, but it is another reminder of how this summer’s weather factored into the harvest schedule.

The bearish news, of course, came out of Canada. Stats Canada seems implicit on hitting farmers when they’re already down on prices. The agency reported an 8.5% uptick in corn production from last year. All told, we’re looking at about 14.31 million metric tonnes.

The production increase is tied to the 7% increase in acreage compared to last year.

Ontario saw a big gain in production from its 2016 figures. Overall, the current yield estimate comes in at 169.5 bushels per acre and 9.0 million tones of corn. Overall, we’re looking at about a 6.9% increase from last year.

Meanwhile, in Quebec, corn production figures declined by 2.6% to reach about 3.7 million tonnes.

Soybean Prices Can’t Find Support

The November soybean futures contract dropped 2.25 cents to close the day at $9.655 per bushel. The January soybean futures contract shed 2 cents to close at $9.76.

Stats Canada has projected a record production figure for Canadian soybeans for 2017. A 28.8% increase will see production of about 8.3 million tonnes for the year.

Total acreage is estimated at 7.2 million acres for the country. That figure is about a 34.6% increase from last year.

Despite the uptick in production, yields aren’t looking as good as they did last year. The expected yield across all of Canada is register at 42.2 bushels per acre, a figure that is off about 4.3% from 2016.

Still, the soybeans are looking good in FarmLead’s home of Ontario. About 50% of the country’s production will come from the province, while yield estimates are poised to give U.S. farmers are run for their money.

Ontario bushels are estimated to hit 49.3 per acre. That’s a 7.4% higher than last year and would be higher than the record set for the province of 48.3 back in 2012.

While Canada’s numbers weighed in sentiment, we discussed the most bearish factor affecting long-term sentiment for soybeans right now.

Check it out our dive into Brazilian production, here.

Spring Wheat Prices Fall Again

In Chicago, the SRW contract for December dipped 0.5 cents to close at $4.43. The March contract added 0.25 cents to close at $4.64.

In Kansas City, the HRW contract for December dipped 0.25 cents to $4.42 per bushel. The March contract was unchanged just below $4.60.

The U.S. Winter Wheat crop is at 13% seeding, which lags the five-year average. Reports indicate that fires in Montana and dry weather around the nation have fueled the delays.

But the big contract to watch was up in Minneapolis. Spring wheat contracts for December dropped 5 cents to finish the day above $6.17. The March contract dipped 5 cents to close the day at $6.31.

Statistics Canada showed up today with a bullish figure for crops. After looking at satellite and agro-climate data, the agency projected a 14.5% decline in Canadian wheat production compared to last year. Dry conditions in the Prairies fueled an estimate of 27.1 million metric tonnes for the year.

Western Canada saw the largest yield declines. Spring wheat production for the country came in around 20.1 million metric tonnes, a decline of 1.8% from last year.

While acreage outpaced last year’s figure by 8.0%, the agency projected average yields of 47.2 bushels per acre.

By comparison, yields for spring wheat were at 52.0 bushels per acre last year

Canola Prices Higher as Harvest Delays Persist

Stats Canada also provide an update on canola production. The agency expects 2017 to be a record year for Canadian production. StatsCan projected total production of 19.7 million tonnes, which represents a 0.5% increase from last year.

Once again, we saw record crop acreage in this category, but weaker yields for everywhere except for Manitoba led to mild gains instead of wild gains.

Canola prices closed the day up in both the November and January contract.

While the bearish numbers may have led the headlines, prices received report thanks to cold and wet weather that is delaying the harvest in Western Canada.

 

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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