It was another positive day for winter wheat prices as ongoing quality concerns have fueled an uptick in purchasing in both Chicago and Kansas City. However, soybeans gave back their gains from Tuesday as markets continue to assess ongoing trade disputes between the U.S. and China, in addition to speculation about an uptick in acreage this spring.
Let’s dive into our daily recap of grain prices at the Chicago Board of Trade.
Wheat Prices Rise Across U.S.
We’ve been keeping a close eye on weather forecasts across the U.S. Plains. Though we’re still expecting much-needed rain to hit key wheat-producing states, the rain will likely be more scattered than initially expected. Ongoing weather challenges offset the news that the USDA has hiked Australia’s wheat production figure for 2018/19 to 24 MMT.
In Chicago, SRW prices for May added 9 cents to close the day above $4.75 per bushel. The July contract added 7.75 cents to end the day a tick above $4.89 per bushel.
In Kansas City, May HRW contracts added 8.25 cents to close a tick under $4.89 per bushel. The July contract added 8.25 cents and closed the day just under $5.08.
Up in Minneapolis, May spring wheat contracts added 5.5 cents to close the day at $6.18 per bushel. The July contract added 3.5 cents to end just under $6.25 per bushel. Ongoing snow across the northern portions of the United States continue to provide gains for spring wheat prices. As we’ll explore more in the days and weeks ahead, it looks possible that more and more farmers will turn to soybeans should the snowpack continue to delay planting of spring wheat.
Tomorrow, we’ll be looking for updates from the USDA on export sales. Old crop estimates for Thursday’s report range from 100,000 MT to 350,000 MT. New crop estimates range from zero to 200,000 MT.
Soybean Prices Dip in Chicago
The May 2018 soybean contract shed 4.25 cents on the day to close just under $10.42. The July contract slipped 4 cents on the day to end just above $10.53. The downturn comes a day before what will be an important weekly export report from the USDA. Markets are paying very close attention to what is happening with the global trade of soybeans with so much tariff talk out of China.
A few weeks ago for our GrainCents readers, we walked through what China might import instead of soybeans, and the impact on the likes of barley, winter wheat, corn, and DDGs, as well as possibly peas. Be sure to read our daily commentary from GrainCents – and start a free 3-week trial today!
China has been increasing its imports from Brazil and South America in order to avoid potential tariffs that remain on the table. While China is looking more at Brazilian soybeans, we’re reading reports that Argentina has been importing from its neighbor as well in order to meet soymeal export demand. Recently, Argentina made its largest order of U.S. soybeans in 20 years for the same reason.
The question is how many soybeans that Brazil will have when the harvest has been fully collected. Today, Celeres projected that the nation’s crop would come in at 115.7 MMT. That figure is higher than the USDA’s April estimate of 115 MMT. However, it’s a noticeable drop from the 119 MMT projected by AgRural.
Corn Prices Find Wednesday Gains
May corn prices added 2.75 cents to close the day at $3.83 per bushel. The July contract added 2.5 cents and closed just under $3.92 per bushel. A quiet day of data featured an update on weekly ethanol production. According to the Energy Information Administration, the U.S. produced 1.009 million barrels of ethanol per day. This was the lowest amount of daily production since the start of the year and represented a 25,000-bpd decline from last week. The agency also reported that inventories declined by a little more than 500,000 barrels.
Tomorrow, we’re going to take a look at export numbers in the weekly USDA report. Looking through trade estimates, the range sits between 700,000 and 1.2 MMT for old crop.
New crop estimates range from nothing all the way up to 200,000 MT.
Turning our attention to South America, we received an update on Brazil’s corn production outlook.
Celeres projects that the Brazilian corn crop will come in at 91.6 MMT for 2017/18.
That’s down from the USDA’s April estimate of 92 MMT.
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