There wasn’t much action at the Chicago Board of Trade Wednesday.
Wheat and corn prices saw small losses. Soybean prices couldn’t claw back from Tuesday’s declines.
The only gains worth noting were up in Winnipeg, where canola prices gained more than 4 cents.
Brennan pointed out several key technical lines of resistance this morning.
Today, we saw December corn, November soybean, and December SRW contracts all test those levels.
Let’s dive into our daily recap of grain trading during a cool afternoon in Chicago.
Small Gains in Wheat Prices
SRW contracts gave back some of the gains we saw earlier this week. The December contract dropped 2.5 cents and closed the day at $4.355. March contracts dipped 2.25 cents.
Down in Kansas City, HRW contracts for December and March both shed a half penny. The next-month contract is trading at $4.335. In Minneapolis, spring wheat prices were on the rise. The December contract added 1.75 cents and closed at $6.215.
Tomorrow, we’re looking at export figures for the week ending 0ct. 19. Traders have set the range for 300,000 metric tonnes to 500,000 metric tonnes.
While Brazil generates more buzz about its soybean and corn production, it was interesting to see the nation’s farm ministry talking about wheat today. The country has seen a drop in quality and quantity of their wheat production.
They are exploring duty-free imports of the grain, which could be a boon to exporters. Brazil tends to rely on Argentina for excess crop. However, Germany and Russia have both pushed their names in the hat, and want to develop a stronger relationship in the future.
Corn Prices Again Test $3.50
Corn prices fell back toward familiar territory again Wednesday. The December corn contract was off 1.75 cents as markets continue to weigh the progress of the harvest and that uptick in crop quality.
Not much really stirred sentiment today. We saw a rise in weekly ethanol production by 20,000 barrels per day. Production over the last two months has been much higher than last year this time. But stocks were cut by roughly 446,000 barrels.
We have to pay attention to the weekly export numbers tomorrow. The USDA is expected to report exports between 800,000 and 1.2 million metric tonnes.
While we’re focusing on that $3.54 resistance level for the December 2017 contract, we have to start dropping our eyes down the page a little bit to that December 2018 contract.
The Dec 2018 contract is hovering at $3.94. We are going to be watching what happens to expected corn acres for the next planting season if that figure is on the wrong side of $4.00 per bushel.
Brazil, China Affecting Soybean Prices
Cash soybean prices fell five cents, while the November contract was unchanged at the end of the day. The November contract closed at $9.755 after rising as much as 7.75 cents in overnight trading.
The January contract was up 0.5 cents and closed at $9.865.
Once again, the focus was on Brazil when it came to soybean prices. Concerns about dry weather have started to abate with rain in the forecast.
As Brennan noted this morning, China continues to increase its soybean imports. However, the bulk of the 298 million bushels they imported last month came from Brazil. China increased its September soybean imports from Brazil by 58% year-over-year.
Dow Jones Retreats from Record
The Dow Jones had its worst day in two months. The index was off more than 120 points heading into the final hour of trading. Earnings reports have been mixed in recent days. The markets were especially blindsided by the hot garbage balance sheet of General Electric.
Meanwhile, the investment bank Natixis said that the U.S. economy is going to slow down substantially within the next few months. They’re basing their claims on high levels of corporate investment, which they expect will decline.
I’m not putting much faith in that call right now, particularly if tax reform is implemented in the next few months. However, there is a limit to how high stocks can go.