September 25: Wheat Futures Retreat in Tuesday Trading

Wheat futures contracts were in the red Tuesday as markets weighed global production numbers and the progress of the Winter Wheat Plant.

Meanwhile, corn prices and soybean prices ticked higher as seasonably cool weather extended across the United States. Rain is expected in the forecast over the next week, with a solid amount of wet weather set to hit the Corn Belt.

Here’s what you need to know about futures prices in Chicago.

Wheat Futures Slide after Progress Report

Yesterday’s Crop Progress report revealed that the U.S. winter wheat crop is going into the growth faster than in recent years. The report showed that planting in Texas is 30% finished, while the Kansas plant is 21% done.

Overall, 28% of the winter wheat crop has been planted. That figure is 2 points ahead of the 5-year average and 6 points ahead of the pace from 2017.

Today, December SRW wheat futures contracts fell 6.25 cents to end the day just under $5.21. The March 2019 contract shed 6 cents and closed at $5.395.

In Kansas City, December HRW wheat futures contracts lost 7 cents and closed at $5.22 per bushel. The March 2019 wheat futures contract shed 7 cents and closed at $5.455.

Spring wheat prices were also off on the day. The December 2018 MGEX wheat futures contract shed 3.25 cents and closed at $5.81. The March contract closed at $5.955 after losing 3.75 cents on the day.

This weekend, we’ll break down the quarterly Grain Stocks report – set for release on Friday. Right now, the average trade estimate calls for wheat stocks ending September 1 to come in at 2.344 billion bushels.

That figure would be a 3% jump, year-over-year. The trade expects an increase due to faltering demand.

Today there were three tenders of note.

  • Bangladesh is 1.8 million bushels in a tender closing October 9.
  • Japan wants 4.0 million bushels of food-quality wheat from the U.S., Canada, and Australia. That tender closes on Thursday.
  • Taiwan is seeking 4.0 million bushels of U.S. milling wheat (shipping mid-November and early December).

 

Soybean Contracts Find Gains in Chicago

November soybean contracts added 4.75 cents on the day to close just under $8.46. The January 2019 contract added 4.5 cents to close just under $8.60.

Yesterday, the USDA said that 14% of the soybean harvest is complete. That figure is 6 points ahead of the 5-year average and 5 points ahead of the pace last year.

Analysts were expecting harvest progress to come in at 12%. With that in mind, the harvest could face a few roadblocks this week as wet weather moves across the country.

The USDA also said that 68% of the soybean crop is rated G/E.

That figure was a 1 point jump from the previous week and 8 points ahead of the 5-year average.

In this week’s digest, we’ll be looking at two key reports that will impact soybean prices.

The first is tomorrow’s monthly crush report from Statistics Canada. If you’ve been following our analysis over the last few weeks, you would know that the U.S .is awash in soybeans and soybean oil. Those factors are having a negative impact on canola prices and crushing margins to the north.

Today, November canola prices added CAD $1.60 to close at CAD $490.90. The January contract finished at CAD $497.70 after realizing similar gains.

Second, we’ll be digging into Friday’s quarterly stocks report. Analysts expect that the USDA will report quarterly inventory levels of 398 million bushels for September 1. That figure would represent an increase of 96 million bushels year-over-year.

 

Corn Prices Tick Higher

In Chicago, December corn prices added 3.25 cents to close just under $3.64. The March contract gained 3.25 cents and ended trading a tick under $3.76. Corn prices received a boost from a large export sale to Mexico.

Today, the USDA reported a private sale of roughly 240,000 MT through the daily reporting system. Markets largely ignored yesterday’s report that the corn harvest is moving faster than in recent years. The agency said yesterday that 16% of the crop has been harvested. That figure is 6 points ahead of the progress in 2017 and 5 points ahead of the five-year average.

This weekend, we’ll be diving into the quarterly stocks report. The average trade estimate for U.S. corn stocks on September 1 is 2.01 billion bushels. That figure is only 8 million bushels higher than the September WASDE 2017/18 ending stocks estimate.

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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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