September 25 – Wheat Prices Rally, Soybeans Slump

Wheat prices were pushing higher on Monday, while soybeans and corn prices barely moved. Grain prices were unaffected by ongoing geopolitical insanity. North Korean officials said today that they felt President Trump’s recent Tweets were a declaration of war…

But markets were resilient thanks to some progress on the Tax Reform front. On Tuesday, we’re going to talk at length on the impact of the Federal Reserve’s decision to roll back its $4.5 trillion balance sheet. Look for some insight into how tax reform would affect farms around the country at FarmLead Insights, next week.

In Chicago, it was another scorching day and a terrible one for anyone with seasonal allergies. Temperatures are expected to remain hot through midweek. Rains are expected to hit the middle of the country tomorrow from Texas all the way up to the Canadian border. Of course, weather wasn’t all that was moving grain prices this afternoon.

Here’s our daily recap of grain speculation at the Chicago Board of Trade and insight into the USDA’s weekly Crop Progress report.

Corn Prices Finish Day in Green

Corn prices fought back after early losses and closed the day in the green. The December corn futures contract added 0.25 cents to close a tick under $3.55. The March 2018 corn contract added 0.5 cents and finished at $3.665.

With the USDA releasing its progress report after Open Outcry, today was all about export numbers. The agency reported total corn exports of 29.1 million bushels. That’s a slight uptick from last week’s 27.1 million bushels.

The problem is that this figure is well behind last year’s figure of 53.5 million bushels for the week. We’re only a few weeks into the new marketing year, and the numbers don’t look good.

The U.S. export sales inspections for 2017/18 are running more than 50% behind last year’s totals for these first few weeks.

Consensus expectations for today’s Crop Progress report called for no change to the 61% of the corn crop rated Good-to-Excellent. Analysts also expected that the USDA would say that 14% of the total corn harvest had been completed. Our Doug Kirk in Downstate Illinois has said that the hot temperatures haven’t been a lot of fun to work in the field.

Did the warm weather help the crop catch up to the five-year average for this time of year?

Nope.

The USDA said that 11% of the harvest has been completed, which is well off from the five-year average of 17%. At this time last year, the harvest was 14% complete.

While analysts were wrong about the harvest, they were right about the quality. We saw no change to the 61% of corn rated G-E.

Soybeans Face Bearish Harvest Pressure

Harvest pressure continued to weigh on soybean prices Monday. The November soybean futures contract shed 13 cents to close just above $9.71. The January 2018 contract slumped 12.75 cents to close just under $9.82.

The USDA reported total exports of 37.9 million bushels. Though the figure came in on the low-end of expected export totals, it’s been a very good start to the marketing year for the country. So far, the US has exported 113 million bushels compared to the 85 million sent through the first few weeks of the 2016/17 calendar.

Today, markets were looking for yet another big sales announcement.

However, nothing came.

Not only are we expecting the second-largest soybean crop ever, quality is improving. After the market closed, the USDA reported that 60% of soybeans are rated G-E-. That figure represented a 1 percentage point gain over the week. Analysts didn’t expect any changes to crop quality, so expect the market to react a bit tomorrow morning.

Meanwhile, the harvest is lagging behind the five-year average. Markets expected that the soybean harvest would be 12% complete. The USDA figure came in at 10%.

Wheat Prices Rally Again

Wheat prices pushed higher again on Monday. The SRW contract for December added 4.5 cents to finish at $4.54.

The March 2018 contract added 4.25 cents to close just under $4.74.

Down in Kansas City, the December HRW contract added 3.25 cents to finish the day at $4.5350. The March 2018 contract added 4 cents to close at $4.72.

In Minneapolis, the MGEX Spring Wheat contract surged 14 cents to finish above $6.48.The March 2018 contract added 14.75 cents to finish just under $6.61.

The USDA reported today that 24% of the winter wheat crop has been planted.

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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