September 18: Soybean Prices Continue to Slump in Chicago

Soybean prices pushed lower again Tuesday as traders continue to weigh ongoing trade tensions between the United States and China as harvest period picks up.

Yesterday, the USDA said that 6% of the soybean harvest was complete, a figure that is ahead of last year’s pace and the 5-year average.

Here’s what else drove grain prices in Chicago today.

Soybean Prices Slump

With the harvest now 6% complete, the current pace is 2 points ahead of last year’s harvest for the same period and 3 points ahead of the 5-year average. Markets largely shrugged off news that soybeans rated G/E fell 1 percentage point from 68% to 67%.

This afternoon, November soybean prices closed the day off 9.5 cents to close at $8.14 per bushel. The January 2019 contract shed 9.25 cents and ended trading at $8.28 per bushel.

Markets didn’t take well to yesterday’s NOPA crush report, which fell short of analysts’ expectations by about 5 million bushels. The 158 million bushels was still a record for the month of August.

Meanwhile, as Brennan noted this morning in the Breakfast Brief, China’s government says that it will import just 83.7 MMT of soybean this year. Cuts to their imports are more likely to come off the U.S. balance sheet, which would really hit U.S. prices even harder.

Those lower prices will likely reduce the number of acres planted next year. Today, Informa Economics predicted that U.S. soybean acreage will hit 82.27 million acres next year. That’s more than 7 million acres lower than the latest USDA forecast of 89.6 million.

Canola prices continued to face pressures thanks to falling soybean prices and the glut of soybean oil across the United States. The November canola contract shed CAD $2.40 to close the day at CAD $486.40 per tonne. The January 2019 contract lost CAD $3.00 to end the day at CAD $492.60.

Corn Prices Retreat Once Again

In Chicago, December corn prices shed 4.75 cents and closed the day just a tick above $3.43 per bushel. The March 2019 contract lost 4.5 cents to close the day at $3.555.

Harvest pressures continue to weigh on corn prices. Yesterday, the USDA said that the harvest is off to a faster start than last year’s pace and the 5-year average.

Meanwhile, markets are looking ahead to next year’s corn crop. Today, Informa Economics said that U.S. corn acres will hit 93.044 million. That figure is about 4 million acres higher than the current USDA estimate of 89.1 million.

Another key factor weighing on corn: Ukraine’s sizeable production. Today, the nation’s agricultural ministry said that total production for the 2018 calendar could hit 1.181 billion bushels. That would leave about 866 million bushels available for export.

Wheat Prices Find Gains

Finally, December SRW wheat prices closed the day up 4.25 cents to end trading at $5.105. The March contract added 3.75 cents to close at $5.29 per bushel.

In Kansas City, HRW prices ticked higher. The December 2018 contract added 3.25 cents to finish the day at $5.16 per bushel. The March 2019 contract added 3.75 cents and closed just under $5.38 per bushel.

Wheat prices pushed higher thanks to reports of ongoing cold weather in Australia that is affecting the nation’s crop and hopes that global supplies will tighten.

In Minneapolis, spring wheat prices fared even better. The December 2018 contract added 5 cents to close the day a tick above $5.80 per bushel. The March 2019 contract added 4.75 cents to close the day just under $5.95 per bushel.

Markets are waiting for spring wheat harvest to close. Yesterday, the USDA said that 97% of the spring wheat harvest is complete, a figure that is 5 points higher than the 5-year average.

Tomorrow morning at 8:30 AM EST, we’ll see StatsCan’s satellite-based production estimates.

For those watching spring wheat prices, in the last three years, Canadian spring wheat crop has been increased by an average of 656,300 MT from what StatsCan estimated in August. Be sure to check back tomorrow.

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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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