March 6: Soybean Prices Slide Ahead of WASDE

Ahead of Thursday’s WASDE report, markets are on the move. Traders are placing their positions ahead of its release.

Technical buying and selling dominated the day at the Chicago Board of Trade. Meanwhile, markets kept a close eye on weather reports for any last minute pop in crop quality or expectations for production both in the U.S. and in South America.

Here’s our daily recap of trading in the Windy City. 

Wheat Prices Slip Tuesday 

In Chicago, May SRW wheat prices fell 2.25 cents to close the day at $5.07 per bushel. The July contract shed 2 cents to close a tick above $5.21.

The Kansas City HRW contract for May fell 4 cents to close at $5.415. The July contract shed 3.5 cents to close just under $5.58.

The spring wheat contract in Minneapolis for May added 4.75 cents. The contract closed at $6.29 per bushel. The July contract added 4.75 cents to end the day at $6.3675.

While futures prices retreated, we saw cash HRW prices pop 11.75 cents on the day. Cash prices are trading just short of the May contract.

On Thursday, analysts are focusing on U.S. ending stocks, while we’ll be putting a lot of focus into any surprise out of U.S. or Argentine production. The average ending stocks estimate is 1.015 billion bushels.

Soybean Prices Dip 

Soybean prices retreated slightly on Tuesday. The May contract shed 2.75 cents to close just under $10.75 per bushel. The July contract dipped 2.75 cents to close at $10.83. What was driving soybean prices today?

Every trader is looking at data to set their positions ahead of Thursday’s WASDE report. Average expectations for U.S. ending stocks sits at 530 million bushels. The range of trade analysts sits between 490 mbu and 590 mbu.

Meanwhile, we’re looking for changes to the Brazilian and Argentine production figures as well. Analysts expect that the USDA will hike the Brazil figure by 1.9 MMT to 113.9 MMT.

But one analyst surveyed by Bloomberg has pegged the figure at 116 MMT.

And another suggested that the crop could top as high as 117.9 MMT.

That was AgRural, which hiked its previous forecast by 1.7 MMT thanks to better rains.

The average Argentine figure is set at 48.5 MMT, which would be a 5.5 MMT cut from last month.

We could see a situation where a rising Brazilian output catches people off-guard if they are too focused on the Argentine figure.

Finally, the USDA did report a solid export figure to China today. The country purchased another 120,000 MT in soybeans in a private sale. 

Corn Prices Gain… Again

The May corn contract added 1 cent to close just above $3.88. The July contract added a penny as well to close at $3.955.

Markets were largely focused on expected changes to Argentine and Brazilian corn production and global carryout in Thursday’s WASDE report. The average trade figure heading into the report puts the global carryout at 2.293 billion bushels. Analysts are expecting noticeable cuts to production in both South American countries.

We’ll be diving deeper into our expectations for the monthly report on Wednesday afternoon.

Today, there was a small amount of data that generated news. South Korea buyers have purchased another 193,000 MT of corn across two tenders. On Wednesday, we’ll be looking for the weekly EIA update on ethanol production.

 

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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