January 23: Soybean Prices Hit Seven-Day Win Streak

It looked like the run for soybean prices was going to end today.

Soybean prices spent most of the day in the red, only to reverse in the final hours and extend the win-streak to seven trading sessions in a row.

Meanwhile, corn and wheat prices retreated Tuesday.

Traders largely ignored news out of Washington that Congress passed an emergency spending bill to reopen the government. The temporary shutdown didn’t do anything to affect the USDA’s reports.

Here’s more from the Chicago Board of Trade.

Corn Prices Dip Again

Corn prices slipped slightly Tuesday.  March contracts shed 0.75 cents to finish the day just above $3.51.

The May contract slid 0.75 cents to tick just below $3.60 per bushel.

The downturn came despite an intriguing update from Informa Economics. Analysts slashed their 2018 corn acreage forecast to 89.179 million acres. That’s a cut of nearly 500,000 acres.

Not a lot of news on the export front.

The USDA did say that private exporters sold another 10.1 million bushels.

We don’t know where to though… they’re heading to destinations unknown. So, lets’ just move on.

Soybean Prices Continue Their Run

The streak isn’t over yet!!!

Soybean prices slingshot back from a slight downturn on the day.

Dry conditions in Argentina pushed front-month Chicago soybean prices up another 2 cents. May contracts closed the day a tick above $9.86 per bushel. The May contract finished (up 2 cents) at $9.9775.

As Brennan noted in the Breakfast Brief this morning, dry weather continues to drive prices higher. There’s very little rain in the forecast over the next two weeks.

The news has many analysts reevaluating their production and yield expectations.

Even though the USDA’s attache in Argentina isn’t ready to make a call, we are expecting that there will be a lot of chatter about the agency’s numbers heading into the WASDE report.

As I noted today in GrainCents, Argentina is the most important factor in the soybean markets right now. In fact, it’s outshining news out of Brussels after the European Parliament moved to ban palm oil for biofuel production.

Today’s big news centered on expectations for soybean acreage in the year ahead.

Informa analysts slashed soybean acreage estimates from 91.387 million acres to 91.197 million. Despite the cut, this latter figure would still be the largest soybean acreage total ever.

Wheat Prices Slide Yet Again

The world remains awash in wheat… which is why we’re looking at downturns across the country. Chicago SRW wheat prices fell 4.25 cents to close the day at $4.215. March HRW contracts slipped 5 cents and closed the day at $4.235. Finally, Minneapolis spring wheat prices fell another 2.5 cents and closed just under $6.06.

Spring wheat prices are now at their lowest levels since June 2017.

Informa announced that winter wheat acreage will come in at 32.608 million. That figure is in-line with USDA estimates. Informa also projects 11.255 million acres of spring wheat and another 2.254 million acres for durum wheat.

Oil Prices Pop Higher on Explosive Growth Outlook 

Brent crude prices popped 1.6% to push above $70 per barrel. WTI crude in the U.S. added another 1.8% to trade at nearly $64.75.

A combination of factors has pushed prices higher. The International Monetary Fund said that global economic growth will hit 3.9% in both 2018 and 2019. The IMF cited strong growth prospects due to loosening monetary policy in Japan and the EU, tax reform in the United States, and development in China and India.

In addition, Saudi Arabia announced that OPEC will likely extend its deal to cap excessive production around the globe past 2018.

Finally, be sure to sign up for the Breakfast Brief each morning, and start making your grain marketing more profitable.

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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