April 9: Wheat Prices Surge in Chicago Ahead of WASDE

It was a good day for wheat prices in the Windy City. Even though snow was falling, we worked through the small reminder of Winter and finished our daily recap of trading at the Chicago Board of Trade.

Here’s what you need to know about grain markets today.

Wheat Prices Whip Higher

And there is the rally we’ve been looking for in April.

SRW wheat prices in Chicago jumped a stunning 18.5 cents for May. The May contract closed the day just below $4.91 per bushel.

For July wheat, the contract added 17.5 cents to close the day at $5.06 per bushel.

In Kansas City, HRW contracts for May rallied 16 cents to end the day just below $5.23. The July contract added 16.25 cents to close just under $5.42 per bushel.

But the biggest nominal gains were found in Minneapolis. The May MGEX contract gained 19.25 cents to end the day at $6.265. The July contract added 19.5 cents to close at $6.365. In addition to the crop report, markets were paying close attention to the Crop Progress report. So far, just 2% of spring wheat has been planted due to cold weather and snowpack across key producing states. That figure is down from an average 6%.
The USDA reported decent export shipments for the week ending April 5. The 430,080 metric tonnes shipped was a slight improvement from the previous week. However, that number was off almost 35% from the same period last year.

wasde-us-winter-wheat-crop-condition-ratings

Soybean Prices Surge Once Again.

We had received questions from GrainCents readers on why we were holding onto a nice chunk of our old crop. Yes, there have been concerns about trade. Yes, there has been chatter about more soybean acres than corn acres. But we’ve long held our ground that China’s potential tariffs on U.S. soybeans are not a reason to overreact. In fact, Brazilian premiums have been rising, which has forced Brazilian customers to turn to other markets for supply.

Today, the USDA reported that export inspections came in just shy of 374,000 MT. This was not a good exports report. The figure was more than 35% lower than last week’s report, and it was almost a 56.5% drop from the same period last year.

As we turn our attention to the WASDE report, trade expectations call for a noticeable drop in global soybean ending stocks. The average trade guess projects a carryout estimate of 92.95 MMT.

Tomorrow, we’re also eyeing an update to the soybean production of Argetnina and Brazil. Ahead of the report, AgRural projected today that Brazil’s total crop would come in at 119 MMT. That would be more than a 1 MMT increase from its last projection.

Up in Winnipeg, the price of May canola slipped CAD $0.80 to CAD $531.00. The July contract fell CAD $0.60 to close the day at $536.70. 

Corn Prices Get Another Bounce

May 2018 corn prices added 2.25 cents to end the day just shy of $3.91 per bushel. July contracts added 2 cents to close the day at $3.99 per bushel.

U.S. corn exports are thriving despite concerns about a trade war. The USDA reported that total export inspections came in at 1.937 MMT, a very bullish figure. That number was a 34% jump from the previous week, and almost a 60% jump from the same time last year.

The other key news came from this afternoon’s crop progress report. According to the USDA, just 2% of the American corn crop has been planted. That’s behind last year’s figure of 3%, but in line with the multi-year average. The chart below provides a glimpse into the state of the U.S. corn crop.

News out of Wall Street

The commodity rally for wheat prices and other grains was assisted by a wild day on Wall Street. The Dow Jones added 46 points, but that was not a reason to celebrate. At one point, the Dow had added more than 440 points; however, the exchange saw a huge slide after the New York Times reported that the Federal Bureau of Investigation had raided the office of President Trump’s lawyer. Trump responded to the FBI’s raid as “an attack on our country.”

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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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