October 16 – Soybean Prices Fall as Traders Take Profits off the Table

November soybean prices fell below $10.00—a shift that beat back expectations for a sustained rally in the markets. Everyone seems to have remembered that we are still one track for one of the largest grain harvests on record.

As we noted over the weekend, some farmers may have missed the chance to sell into that post-WASDE rally, but there could be more opportunities on the horizon for soybean prices. You merely have to know what factors are in play and when a significant market shift could take place. We broke those factors down for soybean prices on Sunday.

Monday’s trading came before the USDA crop quality and progress report. We discuss that report and the tough day for grain prices in our daily report from the Chicago Board of Trade.

December Corn Prices Hover Above $3.50

The USDA reported its weekly crop quality and progress report at 3 p.m. CST. The market consensus called for harvest progress to come in around 32% for the week. But anyone whose been paying attention to the monsoon across the Midwest might know that is a bit too optimistic of a figure.

The agency reported that 28% of the corn harvest is complete. That’s well behind the five-year average of 47%. Last year, the harvest progress sat at 44%.

The lag in the harvest was offset by news that the agency raised its good-to-excellent rating from 64% to 65% over the last week. That figure is still behind last year’s G-E rating of 74%.

Corn contracts dipped Monday before the release of the report.

The December corn contract dropped 2.25 cents to close the day at $3.505. The March contract shed 2.5 cents and closed the day at $3.6425.

The USDA reported underestimated corn exports for the week ending October 12.

The USDA announced this week a 44.5% decline in corn exports compared to the previous week. That’s part of a much broader, bearish trend. Total corn exports so far in the 2017/18 calendar year is now off 33.5% from last year.

There are a few factors that have affected U.S. corn exports. First is NAFTA. Though Mexico remains the largest export market for U.S. corn producers, we have seen some broader resistance to American products due to the Trump administration.

Mexico, the United States and Canada are currently renegotiating the trade agreement. In the meantime, Mexico has been sourcing corn from other markets.

That brings us to the second factor. Large Brazilian grain stocks and lower prices in the region have markets turning to South American nation for corn purchases.

January Soybean Prices Hover Above $10.00

The soybean harvest is also behind across the United States. The USDA reported that the soybean harvest is just 49% done compared to the five-year average of 60%. Condition-wise, the percentage of soybeans rated good-to-excellent came in at 61%, unchanged from the week prior.

Soybean prices were down before the reported was released.

Soybean contracts for November dropped 9.25 cents to finish at $9.91.

The January contract fell 8.75 cents and ended the day at $10.015.

What was moving soybean prices today?

The Largest September Soybean Crush Report Since 2007

The National Oilseed Processors Association (NOPA) Crush Report said that total soybean crush figures for September came in at 136.42 million bushels. That figure fell below trade expectations but were also the largest crush totals for September since 2007.

The USDA announced yet another large export sale to unknown destinations. All told, the delivery will be for 227,300 metric tonnes.

Total exports for the week indicated an 18.8% increase from the previous week. The total, which was about 65.0 million bushels, was still off about 11.4% from the same period in 2016.

As we noted over the weekend, there we will see blips in soybean prices as the winter months arrive. Be sure to check back to our Insights page to know when you are getting the best price for your grain.

Wheat Prices Still Looking Bearish

Traders were taking some gains off the table after the rise in prices on Thursday and Friday. Bearish export figures negatively affected grain wheat prices as well. The USDA announced that total wheat export inspections came in at 11.86 million bushels for the week ending Oct. 12.

That figure is off 30.5% from the same week last year. It’s also about an 8% decline compared to the previous week.

December SRW contracts shed 3 cents to finish the day at $4.355. The March contract dipped 3 cents to close at $4.55

Down in Kansas City, HRW December contracts were off 2.5 cents to close at $4.3375. The March contracts were off 2.75 cents to close a tick below $4.52.

Finally, MGEX December spring wheat prices were down 5.75 cents to close at $6.0925. Finally, March contracts shed 5 cents to finish at $6.24 per bushel.

Oil Prices Have Bigger Day Than Soybean Prices

Oil prices continued to push higher as markets follow geopolitical instability in the Iraqi Kurdish region. According to media reports in the region, pro-Iraqi government forces stormed the oil-rich city of Kirkuk and seized the territory from the local government.

Kurdish residents have been pressing for independence from Iraq but met with sharp resistance from the national government and nearby Turkey. The region shut down production of about 350,000 barrels per day as safety concerns followed their September 25 vote for independence from Iraq.

That story wasn’t the only factor moving the oil markets on Monday. President Donald Trump fueled some jitters after he refused to certify the Iran nuclear deal. The decision will allow Congress to impose new sanctions on the Iranian economy soon. Finally, markets were also awaiting more information on a production rig that exploded and caught fire in Louisiana.

Another Way to Get Higher Soybean Prices

FarmLead has a big announcement coming up this week. So stay tuned to FarmLead Insights. We’re introducing a revolutionary tool for U.S. farmers to improve their grain marketing and to get the best price possible for their grain.

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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