March soybean prices popped above $10.00 Tuesday as markets continue to eye the quality of the Argentine crop. Meanwhile, wheat prices popped on growing concerns about quality and growing conditions across the Midwest.
Today’s surge was almost inverse to the slump faced on Wall Street. The threat of rising interest rates pushed the Dow Jones down 362 points, the worst daily downturn of 2018.
Here’s what you need to know from the Chicago Board of Trade.
Argentina Lifts Soybean Prices
Okay, the USDA is going to slash its production and yield numbers for Argentina, right?
Argentina is now turning into the key factor of the WASDE report.
That’s because two additional groups altered their expectations for the nation’s crop.
Hot, dry weather is wilting away the soy crop.
Today, Rabobank slashed its forecast for Argentina’s soybean production to 51.5 million MT.
The January WASDE report said 56 MMT.
Meanwhile, the Rosario Board of Trade cut its yield expectations by 13% and said that production for the 2017/18 crop would be 52 MMT.
Once again, the January WASDE report said 56 MMT.
Oh, and the really big change came out of Cordonnier. They slashed output expectations in both Brazil and Argentina by 1 million MMT each. They forecast that Brazil’s soybean crop will come in at 111 MT, while Argentine production would hit 51 MT.
Once again… you get the picture.
U.S. soybean prices have also pushed higher thanks to increased demand from China and other buyers in the market. The combination of Brazil’s delayed harvest and its stronger currency have forced buyers to look north.
Today, the March contract popped 8.75 cents to close the day a tick above $10.00.
Meanwhile, the May contract gained 8.5 cents to close just above $10.11.
March Corn Prices Press Above $3.60
Morale was higher today for corn producers as the March contract pushed to $3.615. A 2.75-cent increase pushed the contract to its highest level since early November.
Corn cash prices hit $3.5525 in Chicago.
Today’s big news was the adjustment to Argentina’s corn production figure by Rabobank. Like the nation’s soybeans, the Argentina corn crop continues to cook in the sun. Rabobank slashed the forecast by 2 million metric tonnes to 39 MMT.
It has been a nice three-day run for U.S. corn exports. A weaker dollar and ample supply helped press three big deals out the door. Friday, we saw 125,000 MT of corn head to unknown destinations. Monday, 115,000 MT went to Egypt. And today 132,000 MT to Spain.
Tomorrow, we’re looking for another strong report from the EIA on ethanol.
And speaking of ethanol, two companies down in Brazil announced plans to upgrade their biofuel facilities in Goias and Mato Grosso. This will add about 200 million gallons of annual capacity, good news to help farmers reduce any glut in the region and help them overcome logistical challenges in sending crop to their ports.
Hard Red Winter Wheat Prices Pop
It was another good day in the wheat markets, especially for owners of Hard Red Winter wheat.
In Kansas City, HRW contracts surged 16.75 cents to close just under $4.70. The May contract also added 16.5 cents to close at $4.8425.
Yesterday’s reports on state quality fueled a sharp uptick in buying. The crop conditions were pretty brutal. Down in Kansas, just 14% of the winter wheat crop is rated good-to-excellent.
In Oklahoma, that figure is 4%.
Here in Chicago, SRW contracts added 8 cents to close the day above $4.57 per bushel. The May contract added 8.75 cents and closed just under $4.71.
In Minneapolis, prices pushed higher as well. The March contract gained 2.25 cents to end the day at $6.16 per bushel. The May contract added 2.75 cents to close at $6.26 per bushel.