Grain Markets Today: Corn and Wheat Prices Push Higher (September 20)

Down at the Chicago Board of Trade, grain prices were ticking higher Wednesday. The price of wheat, corn, and soybean contracts all showed gains, while wheat prices in Kansas City and Minneapolis also followed suit. With the Statistics Canada and WASDE reports out of the way, traders were turning back to weather forecasts.

U.S. markets slipped at the conclusion of the Federal Reserve’s conference on Wednesday. The central bank has approved the unwinding of its massive stimulus program. The Fed will begin to unwind its $4.5 trillion balance sheet in October. However, the bank did not announce any changes to its benchmark interest rate.

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

Corn Prices Up on Ethanol Dip

Corn contracts for December, March and May all added 1.25 cents. The December contract finished the day at $3.50, while the March contract closed at $3.625. Markets turned the attention to the Energy Information Administration’s weekly report on ethanol production.

The EIA said that daily production for the week ending Sept. 15 declined by 14,000 barrels. Meanwhile stocks increased by 6,000 barrels. The U.S. now has about 21.14 million barrels of ethanol in storage.

As we noted this week, more farmers in China are turning acreage from corn to soybeans as the world’s largest importer of soy ramps up its own production. That said, we are seeing that more Chinese producers seem willing to hold onto older corn crop with the hopes that prices will increase in the future. Is this a bullish or bearish factor or is it just noise?

We’re currently developing our daily Cash Markets content to provide investors with a deeper dive into the price factors that traditionally go ignored. Be sure to check out FarmLead’s Insights channel for our latest insight on the most bearish thing about soybeans.

March Soybean Contract Eyes $10.00

The November soybean contract added 4.5 cents to close the day at $9.70. The January contract topped $9.80, while the March contract fell just short of $9.90.

Today, the USDA announced a massive 1.21 million metric tonnes of soybeans for export. Roughly 132,000 of these soybeans are heading to China in the new marketing year.

Meanwhile, another 1.08 million metric tonnes are bound for unknown destinations. 960,000 of these soybeans will be sent during the 2017-2018 year. The balance will be delivered in the following marketing year.

In addition, traders were keeping a close eye on the weather in South America.

Dryness in Brazil is delaying planting in Brazil, while Argentinean plantings have been affected by rains across the region.

Wheat Prices Add 1%

The SRW futures contract for December added 6.75 cents to close the day just under $4.50. The March SRW contract gained 5.75 cents and closed a tick below $4.70.

Down in Kansas City, the December HRW contract gained 6 cents to close at $4.48. The March contract added 6.25 cents to close just under $4.66.

Finally, in Minneapolis, the spring wheat contract gained 4.25 cents to finish the day at $6.215. The March spring wheat contract closed the day above $6.34, up 3.25 cents.

Analysts were revising their expectations for Canadian wheat production after Tuesday’s report from Stats Canada. Analysts have increased expectations to a range of 27 million metric tonnes to 29 million metric tonnes. The USDA’s latest report suggested production of 26.5 million metric tonnes.

Crude Oil Hits Five-Month High

The price of Brent crude oil topped $56 and hit a five-month high. Brent is now trading about $2.00 below its 2017 high set earlier this year. Meanwhile, WTI crude oil burst through the $50 ceiling thanks to concerns about Hurricanes Jose and Maria and a weaker U.S. dollar. Markets largely ignored that U.S. inventory levels increased last week by a wider-than-expected margin. Instead, traders cheered the news that Iraq may encourage additional cuts by OPEC members in order to help bolster prices.

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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