January 4: Spring Wheat Prices Continue to Climb on Weather Woes

Here in Chicago, most of the grain complex retreated as some traders took gains off the recent uptick in prices. In addition, traders are still eyeing weather reports and anticipate some relief from the frigid conditions sweeping the nation.

That said, spring wheat prices saw higher gains as demand for high-quality wheat continues to rally.

Today’s commodity trading session was overshadowed by big gains in New York City. The Dow Jones Industrial Average passed 25,000 for the first time. Positive economic data from around the globe continues to push stocks higher, while the U.S. dollar continues to weaken.

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

Spring Wheat Prices Pop in Minneapolis

Wheat prices dipped in Chicago and Kansas City, but that didn’t stop gains in Minneapolis. Spring wheat prices for March at the MGEX added 8 cents to close the day just under $6.28 per bushel. The May contract added 5.75 cents and finished just under $6.33 per bushel.

At CBOT and KCBT, prices slipped. March SRW contracts fell 2 cents and ended at $4.34 per bushel. March HRW contracts shed 2 cents to close at $4.39. Investors took some gains off the table at both exchanges ahead of tomorrow’s export figures. It’s anyone’s guess as to how the U.S. exports are looking ahead of tomorrow. Trade expectations are set between 8.3 million and 18.4 million bushels.

Corn Prices Falter

Ahead of tomorrow’s trade data report, corn prices dipped. March 2018 and May 2018 contracts both fell 2 cents on the day. The front-month contract ended the day at $3.51. The May contract closed the day a tick above $3.59.

Not much news to report here in the U.S. on the corn trade. Ethanol production did slide a little last week, but with output still near record highs, we don’t anticipate too much of a shakeup in the biofuel sector from a demand side. The key concern is that prices have been falling, making it harder to breakeven over the last few months.

Tomorrow morning, we’ll dive deeper into the export numbers for the week ending Dec. 28. There’s a bit range in trade expectations – 23.6 million to 39.4 million bushels.

Ahead of this week’s 2018 corn outlook, we have to factor in how many acres farmers plan to shift from corn to soybeans.

Soybean Prices Bring South America in Focus

Back to the weather in South America. Sorry to bring it up so much, but that is where the traders’ attention lies these days. Though we’re hearing that La Nina will start to weaken in the spring months, [1] there’s no denying the impact of dryness across Brazil and Argentina.

Soybean planting is going now at its slowest pace in history, according to Pablo Pochettino of Intagro in Buenos Aires. AgroEducacion has said that the mild La Nina system is pushing regional temperatures above normal. The lack of rain isn’t helping. Planting is now just 72% of the 44.7 million acres that were estimated. [2]

Tomorrow, the soybean exports are expected to come in between 22.0 million and 36.7 million bushels for the week ending Dec. 28. This is the last report on soybean exports before the new delivery rules for China kick in.

The $14 billion-per-year business of sending soybeans to China will now face new hurdles to reduce foreign material requirements. It’s going to be a steep challenge, as half of the shipments sent to China in 2017 would have failed the requirement of having a percentage of foreign materials below 1%. [3]

2018 Grain Market Outlooks

With more information flying at farmers than ever before, it’s difficult to get all of your insight in one place to help you make actionable decisions on your grain. That’s why FarmLead introduced GrainCents, a subscription service dedicated to telling farmers when to buy and hold their grain.

Also, we provide regular price analysis and a deep-dive into the major (and minor) factors impacting your crop every day. In GrainCents right now, there are over 90 different factors that we have identified as either bullish, bearish, or noise for 12 different crops.

With this insight, we help you identify windows to get the best price possible for your crop. We also identify in GrainCents what percentage you should hold on your 2017/18 old crop, as well as where your sales should be on your 2018/19 crop.

Next week, we’re giving our GrainCents subscribers a special report that is worth more than an annual subscription to the service on its own.

We’re unveiling our 2018 grain prices forecast exclusively to our GrainCents readers of these 12 crops.

Inside these reports, we’re going to discuss the critical factors that will affect your grain in 2018. More importantly, we’re going to begin to set our schedule for potential selling opportunities so that we can capture the best price possible in the year ahead.

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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