October 17 – Corn Prices and Soybean Prices Sink Again

Soybean Prices Sink Again

Soybean prices fell again Tuesday as traders took more profits off the table.

Even though the Dow Jones hit an all-time high in New York, grain trading dipped on bearish sentiment around global production, weather events, and – of course – the USDA.

Here’s our daily recap from the Chicago Board of Trade.

Corn Prices Dip Again

Another day, another decline in the corn complex.

Cash prices fell by 4.75 cents, while the December contract dipped 0.5 cents and closed at $3.50. Corn prices have given up nearly all of their gains since last Thursday’s WASDE report.

Markets also digested news that Chinese farmers may grow more corn in the coming year.

Falling soybean prices have made corn more profitable, even though the nation’s top producing province saw the government slash its subsidies by 13%.

Yesterday’s crop progress report showed mixed data that left traders on the fence.

While the harvest is just 28% complete, a figure that is well off from the five-year average of 47%, the USDA did increase corn rated “good-to-excellent” by another percentage point.

On the data front, the USDA announced two large export figures through the daily reporting system.

A private sale of 5.7 million bushels is off to destinations unknown.

Another sale of 4.5 million bushels will be heading to Mexico.

This shipment comes at a time that the U.S. and Mexico are concluding the fourth round of negotiation for a revision of NAFTA.

November Soybean Prices Slump from $10.00

Remember the November 2017 soybean contract? The one that ticked above $10.00 at the Chicago Board of Trade on Friday, Oct. 13.

By the end of Tuesday’s session, the contract had shed more than 15 cents in two sessions.

Soybean prices have faced a slew of bearish news.

Yesterday’s crop progress report played a small role, and yesterday’s bullish NOPA crush figure went ignored. The biggest noise today came from news that China’s production levels might hit more than 529 million bushels this year.

Even though the country has already increased imports by 15%, the production figure represents a double-digit increase compared to last year.

In Chicago, some traders had been holding out hope that dryness across Brazil would push November soybean prices back above the double-digit level.

But seasonal weather has benefited U.S. producers who have been cutting beans, and Brazilian farmers who have accelerated their planting season.

Markets also didn’t care much for the news from Monday’s progress report. The USDA reported no change in quality, but the harvest is almost halfway complete.

Though the 49% progress is 11 points back of the five-year average, farmers continue to accelerate their fall harvest. 

Russia Rattles Wheat Prices Again

In the wheat complex, SRW contracts in Chicago were off 1.75 cents to close the day a notch below $4.35.

Markets were more concerned about Russia today than they were about news that the U.S. winter wheat crop is lagging the five-year average by 11%.

IKAR in Russia increased high-end of its wheat production forecast range to 83.7 million metric tonnes.

As we’ve explained in recent commentary, Russia is absolutely killing sentiment in the wheat markets.

Finally, Japan is seeking 123,736 metric tonnes of wheat from Australia, the United States and Canada. A little more than half is expected from the United States. The tender is due Thursday.

 

In Kansas City, the December HRW contract dropped a half cent to close just above $4.33.

In Minneapolis, spring wheat did find some traction, adding 1.5 cents to close at $6.11.

On Tap Tomorrow

Finally, check in tomorrow with FarmLead for a major announcement that will alter the way that farmers can compete in today’s agricultural sector.

FarmLead will unveil one of the latest tools that will help farmers better market their grain and get the best price possible in today’s market.

Stay tuned to FarmLead Insights and Grain Markets Today.

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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