October 2: Wheat Prices Pop as Markets Cheer New Trade Deal 

On Tuesday, markets cheered the death of NAFTA and welcomed the United States-Mexico-Canada Agreement or U.S.M.C.A.

The new deal fueled optimism that U.S. trade representatives will turn their attention to improving relations with China. The new deal will give U.S. dairy farmers greater access to the Canadian market, while Mexican and Canadian auto manufacturers will see expanded access to the American market. As Brennan noted this morning, it took 14 months of negotiations to arrive at this deal.

Here’s what else you need to know about grain trading at the Chicago Board of Trade.

Wheat Prices Pop on Trade Deal

December SRW wheat prices added 9.75 cents to close the day a tick above $5.19. The March contract gained 9.25 cents to end the day at $9.38. 

In Kansas City, December HRW contracts gained 11 cents to close at $5.225. March HRW prices gained 10.75 cents to close at $5.465. 

Spring wheat prices also rallied on the trade deal. December MGEX contracts popped 14.25 cents to end trading at $5.915. The March 2019 contract popped 13 cents to finish just above $6.04. 

The markets are still reacting to yesterday’s release of the USDA’s Crop Progress Report. The agency said that winter wheat planting is 43% complete. That is ahead of the five-year average of 40%. 

Corn Prices Tick Higher

Rain across the Midwest is likely to set to delay the harvest for both corn and soybeans. With that said, there is still plenty of room for delays. Yesterday, the USDA said that 26% of the corn harvest had been completed. That is 10 points ahead of last year’s pace, and 9 points ahead of the 5-year average.

Corn prices found gains this afternoon. The December contract added 1.75 cents to end the day at $3.675. The March corn contract added 1.75 cents to end the day at $3.795. 

Traders largely ignored today’s report from INTL FCStone. Analysts at the firm projected that U.S. corn yields would hit 182.7 bushels per acre. That would be a new record for U.S. corn yields. It is also 1.4 bushels higher than the USDA’s estimate in the September WASDE report. 

Soybeans Rise on China Speculation

Soybeans popped in Chicago. The November contract added 8.25 cents to end trading at $8.66. The January contract added 8.25 cents to end at $8.80. 

Canola prices also found gains. November canola prices gained CAD 3.10 to finish trading at CAD 497.70. The January contract added CAD 3.00 to end at $503.40. 

Yesterday, the USDA said that  83% of the soybean crop is dropping leaves. That figure is ahead of 2017’s pace of 78%. The five-year average is  75%.

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

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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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