Here in Chicago, grain markets were largely flat. Soybeans and corn prices grinded out gains. Traders were once again focusing on the weather.
Even though the fall season starts tomorrow, we’re still expecting temperatures north of 90 degrees in Nebraska and South Dakota this week. In addition, there isn’t expected to be much rain across the Midwest.
Here’s our short and sweet recap from the Chicago Board of Trade on Thursday, September 21.
Corn Prices Nudge Higher
The December corn futures contract added 0.25 cents to close the day above $3.50 per bushel. The March contract gained 0.5 cents to finished the day at $3.63.
Today, traders parsed through the USDA’s weekly update on export sales. The agency reported old crop sales of 20.7 million bushels, a figure that was about half of the previous week’s final number. Despite concerns about NAFTA renegotiations, Mexico was still the largest customer for U.S. corn crop. Japan and Columbia were second and third, respectively.
The bigger news today was the booming level of demand expected out of China. Even though the country is the world’s second-largest corn producer, the nation is probably going to need to import a ton of the crop in order to fulfill expected demand for ethanol.
One analyst projects that the total imports required could hit 787 million bushels to meet igs E10 standards set for 2020. That figure blows away the expectations of the USDA, which had forecasted import demand of 150 million bushels.
Soybeans Tick Higher on Export Numbers
The November soybean futures contract added 0.75 cents to finish just below $9.71. The January contract added half a penny to close at $9.81.
Traders are chasing their tails as they continue to spin through the combination of bullish and bearish factors affecting the broader market. Today, export numbers indicated a huge figure for U.S. producers. Another sale of 4.8 million bushels was set for delivery to China. We’ve witnessed huge individual orders in eight of the last nine days.
Roughly 86 million bushels off old crop sales were reported for the week ending September 14. That was about a 45% increase from the previous week and a 125% jump from the same period last year.
While these are bullish factors, the world is still awash in soybeans. With stocks hovering at current levels, it will be interesting to watch if the U.S. can maintain its streak of large sales. In addition, it’s just a matter of time before Brazilian farmers catch a break in the weather and can begin planting more of the crop.
Wheat Prices Show Some Life
The wheat markets showed far more life this afternoon. The December SRW contract in Chicago added 2.75 cents to close at $4.545. This was the highest price these contracts have traded since mid-August. The March SRW contract added 2.25 cents.
Down in Kansas City, the HRW contract for December added 1.5 cents and closed the day at $4.495. The March contract added another 1.5 cents to close the day at $4.675.
Finally, in Minneapolis, the Spring Wheat contract for December gained 2.75 cents and closed above $6.24. The March contract gained 1.75 cents and closed the day at $6.36.
While managed money remains short in the wheat market, the big talk is about global weather. Australia’s drought continues to affect protein quality, and Argentina’s rain remains a critical short-term factor. Of course, there’s also Russia, which we will dive into on Friday morning.
Export shipments for U.S. wheat failed to come in at a strong number. Roughly 11.3 million bushels passed through last week, well below the 14.7 million expected by analysts. That figure was also lower than what the USDA had hoped.
On the global front, Russia continues to dominate the wheat market. With the nation’s infrastructure running at full capacity, Russia’s weak ruble has been a boon for its wheat exports. The proximity of its Black Sea ports has made it extremely hard with rivals to compete in exporting crop to Middle Eastern customers.
Bloomberg offered interesting insight on Thursday about Russia’s neighbor Ukraine, which must maintain lower wheat prices in order to compete. Though Ukraine’s prices as of September 15 were slightly lower than those in Russia, Egypt’s demand for 12.5% protein is a bit of a game changer for the exporter. Ukraine may struggle to meet such protein demands in the near term.