Up in New York, stock traders are popping champagne bottles over the tax reform vote in Congress. Here in Chicago, bearish factors have us drinking water out of a fire hose, particularly for anyone following soybean prices.
The House of Representatives approved the largest tax overhaul in the last 30 years on Tuesday. It will now move to the Senate, where a narrow vote is expected, but the bill will still likely pass.
Meanwhile, here in Chicago, it was a dull day in the wheat and corn markets. Headlines and first position in our recap go to soybean markets, which received even more bearish news from Argentina.
Here is your daily recap from the Chicago Board of Trade.
Soybean Prices Slide Again
Another day, another downturn in soybean prices.
I know I’m not supposed to talk too much about the weather, but what can do you when Argentina’s forecasts are singlehandedly knocking any optimism out of the markets?
The Janauary 2018 contract fell to levels we haven’t seen in a very long time. The contract fell 5.5 cents and closed the day at $9.56 per bushel. The March contract dipped 5.5 cents and closed a tick below $9.57.
Weather reports out of Argentina and Brazil show that a much-needed drink are hitting the areas affected by dry conditions. In addition, it didn’t help price after new reports indicated that Brazilian production is looking better than initial estimates.
There wasn’t too much bullish news in the industry. The USDA did announce the sale of 5.3 million bushels to destinations unknown. But that delivery isn’t set until the 2018/19 marketing year.
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Cold Weather and Wheat Prices
In Chicago and Minneapolis, we saw wheat prices dip slightly. The March SRW price fell by a penny to hit $4.195. The May 2018 contract dipped 0.75 cents to close the day just under $4.33.
At MGEX, the spring wheat contract for March and May dipped by a penny. The March contract closed at $6.1825, while the May contract ended the day at $6.2625.
Gains were made in Kansas City. The March 2018 contract added 0.75 to close at $4.20. The May contract added 1.25 to close at $4.33.
Markets were reacting to the cold snap set to hit the central plains next weekend. The question that everyone is asking is tied to the amount of snow that farmers can expect.
Following all of the bearish news that has hammered the wheat complex over the last few months, we have to wonder if the worst is over for wheat prices. Last week’s WASDE report was largely responsible for the contract lows we’ve witnessed, but managed money doesn’t seem to be offering any reason to show optimism.
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Corn Prices Show Small Gains
Finally, corn prices showed some small gains Tuesday.
The March 2018 contract added 0.5 cents, while the May contract matched those returns. The March 2018 contract is sitting at $3.475, while cash prices in Chicago added 2 cents to close at $3.37.
There wasn’t much news on the U.S. front today. We did hear that China’s top corn producing province has slashed its corn acreage by 2.4 million acres. Simply put, the nation is awash in grain and more production won’t help their inventory problems.
Meanwhile, Brazil has been producing ethanol at a breakneck pace. Today production hit 7.14 billion gallons last month. That’s a big leap from the 6.89 billion produced just two months ago.