February 1: Soybean Prices Crater in Chicago

Two days after March soybean prices popped above $10.00, a sell-off has now pushed them down 15 cents. Today’s 10.75-cent selloff came on news of weak export data and improving weather prospects in South America.

Meanwhile, corn and wheat prices didn’t move much, but they moved in different directions.

Where did soybean prices and other grain prices end up after today’s trading session?

That’s why we cover the big and little moves in grain prices each day from the Chicago Board of Trade.

Soybean Prices Slump

The March and May contracts are now under $10.00 after a two-day selloff. The March contract shed 10.75 cents to close the day at $9.85 per bushel. The May contract dropped 10.5 cents to close the day at $9.965 per bushel.

Up in Canada, March canola prices shed CAD $2.40 to finish the day at CAD $494.30. The May contract dipped CAD $3.10 to close at CAD $500.00.

Here are the soybean highlights…

First, old crop export numbers for last week came in at just a tick above 359,014 MT.

This report stinks. It was well below trade estimates, which ranged from 600,000 MMT to 1 million MMT.

Meanwhile, the USDA said in its December Oilseed crush report that 175.405 million bushels were crushed for the month. That was under expectations as well.

Oh, there’s more bad news.

INTL FCStone announced that they had increased their Brazil soybean production estimate by another 1 million tonnes. Their current estimate is just above 111 MMT.

Was there any good news?

Not really, unless you count the fact that the  Buenos Aires Grain Exchange cut its national Argentine production estimate to 54 MMT. That is a cut of 3 MMT.

The issue is that markets have already largely priced in a cut ahead of the February WASDE report.

Analysts across Argentina have been slashing their production and yield numbers due to the dry, hot weather hitting the country.

Corn Prices Tick Higher

The March corn contract added 0.25 cents to close the day a tick under $3.62 per bushel. The May contract added 0.5 cents and finished at $3.70 per bushel.

Today’s export data was very positive, but not enough to cause a pop. The USDA reported total exports of 1.851 million MMT.

Big league stuff there, as it topped the high-end of trade estimates (1.5 MMT) and surpassed last week’s number by about 28%.

So, what was keeping prices in check?

Brazil.

The nation’s trade leaders said they shipped 3.022 MMT for the month of January.

That number was more than 100% higher than shipments in January 2017.

There is another factor creeping up on farmers that I tackled in GrainCents yesterday.

It’s really sliding under the radar.

Wheat Prices Mixed Across U.S.

In Chicago, March SRW prices dipped 0.75 cents and closed at $4.51 per bushel. The May 2018 contract dropped 1.25 cents and closed at $4.6425.

Down in Kansas City, the front-month KC-Chicago spread narrowed slightly to 16 cents after March HRW contracts dipped 0.25 cents. The contract closed the day at $4.67 per bushel.

The May contract dipped 0.25 cents to close just under $4.82.

Up in Minneapolis, spring wheat contracts closed the day in the green. March contracts added 4.5 cents and finished just under $6.12. The May contract added 4.25 cents and closed at $6.225.

Before we get to export data, two important news items.

  • Saudi Arabia announced a tender for a whopping 715,000 MT of wheat; and,
  • Despite a tough winter at the ports, Russia’s SovEcon hiked its 17/18 Russian wheat export estimate to  36.8 MMT. That was an increase of 1.3 MMT.

Okay, let’s talk export data. For the week ending January 25, old crop shipments totaled 289,106 MT. That number was just below analysts’ expectations and almost 36% under the figure for the same time last year.

Diving into the report, Japan topped the customer list with roughly 91,100 MT. Mexico was second at 56,286 MT.

Both countries have been subject to our analysis in GrainCents.

With the Trans-Pacific Partnership slated for acceptance in March, a major shakeup is happening in the markets right now.

We project that there will be a lot of changes in demand in the coming months, which could impact acreage and planting expectations for years to come.

To learn more, sign up for Graincents, right here and get a free three-week trial.

 

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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