February 13: Soybean Prices Are On Fire

I have to keep it shorter than usual this afternoon… but — wow — are soybean prices surging.

If you’ve been following our insight over the last few weeks, you know that weather in Argentina is pushing soybean prices higher and higher.

Our GrainCents readers just received an important notice about what to do with their grain and oilseeds moving forward.

Our Grain Markets Today readers need to know what’s going on right away.

Here’s what you need to know from the Chicago Board of Trade.

Soybean Prices Jump Nearly 1%

Tuesday was a strong day for soybean prices, The March contract jumped another 10 cents to closed the day just under $10.12 per bushel. The May contract added 9.75 cents to finish at $10.225.

The uptick coincided with news that Dr. Michael Cordonnier slashed his Argentine production expectations by another 1 MMT. His 50 MMT projection is now 4 MMT below the estimate of the U.S. Department of Agriculture.

What does Cordonnier know that the U.S. agency doesn’t?

“As I have said many time, you always have to wait for soybeans to judge the final yield. I think the soybean yields in many areas of Argentina have already been negatively impacted, but the final yield will be determined by the rainfall over the next 4-5 weeks. If Argentina would receive some good rains during that period, the soybeans could make a partial recovery. If it stays hot and dry, the yields will decline even further,” he wrote on Tuesday.

Corn Prices Dip Tuesday

The March contract for corn prices dipped 0.25 cents to finish the day at just under $3.67 per bushel. The May 2018 contract closed off 0.5 cents to close a tick above $3.74.

A quite day of data was highlighted by news that Dr. Michael Cordonnier has slashed his production figure for Brazilian corn output to 86 MMT. That was a 2 MMT cut from his previous estimate, and a whopping 9 MMT from the February estimate released just a week ago. He also slashed his Argentine crop expectations by another 1 MMT to 40 MMT.

Wheat Prices Retreat

It was a bad day for spring wheat prices in Minneapolis. We saw that March contract flirt with the $6.00 level again Tuesday. The contract finished the day off 8.25 cents to close just a tick below $6.02 per bushel.

The May contract dipped 7.75 cents to finish the day under $6.15 per bushel.

In Chicago, SRW contracts closed the day off 6 cents for March and finished just below $4.55. The May contract shed 5.75 cents to finish the day at $4.68 per bushel.

Down in Kansas City, the spread between SRW contracts and HRW contracts remained above double digits. The March HRW contract shed 5 censt to close at $4.695. The HRW contract for May fell 4.75 cents to finish the day at $4.845.

There wasn’t a significant amount of news today affected prices. We did see that China sold about 280,000 MT of its state reserves, while Japan put out a tender for about 85,000 MT from the U.S. and Canada.

As we’ve noted in the past, it will be interesting to see how the TPP affects future tenders like this one.

Given that the U.S. will not be a part of the Trans-Pacific Trade agreement, Canada could see far more demand from Japan, whose largest customer has been the U.S.

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.

Most Recent Posts
Aug 16 – Wheat Exports and the Trade War’s Impact
August 16, 2019 Brennan Turner
As we investigate vegetable oils and wheat exports this morning, grain prices are mostly higher as the traders buy up some bargain prices.
October 4: Corn Prices Edge Higher With October WASDE in Focus
October 04, 2018 Garrett Baldwin
Corn prices ticked higher Thursday as traders and analysts began to speculate on next week’s release of the October WASDE report.
Accounting for Weather Ahead of Corn & Soybean Plant 2019
March 18, 2019 Brennan Turner
While the trade war is still grabbing a lot of headlines, it's the recent volatile weather that is starting to help grain prices improve.