Wheat prices received a big boost Tuesday after blisteringly cold weather ravaged the Midwest. Wheat contracts in Chicago and Kansas City both showed solid gains as farmers across the region attempt to gage the impact of negative temperatures and unseasonably dry conditions.
While it still makes no sense why people live here in Chicago (the wind chill is minus 20), here is your daily recap of grain trading from the Chicago Board of Trade.
Wheat Prices Add More than 1%
March SRW contracts added 6.5 cents to close the day at $4.335. May contracts added 6 cents to close a tick above $4.46. Down in Kansas City, the gains were a bit more pronounced. The March 2018 HRW contract added 7.5 cents to close just under $4.35. The May contract added 7 cents to close at $4.48.
Spring wheat prices in Minnesota also received some support. March MGEX wheat contracts added 3.25 cents and closed at $6.18 per bushel. The May contract gained 3 cents and closed at $6.255.
The big moves came after a wall of cold weather invaded from the north and turned most of the central United States into a set from Game of Thrones. Wheat acreage is already sitting at lows not seen in a century.
Now, we’re starting to hear chatter that the lack of a snow cover heading into the New Year’s weekend could have led to significant exposure and negatively impacted the quality of the crop. We already knew that there wasn’t much in the way of moisture heading into the new year.
There aren’t many places from Colorado to Illinois that had even 40% of the typical wet weather for the months of November and December. In a GrainCents piece loaded today, I looked at the potential damage to the US winter wheat crop, and the implication for winter wheat prices.
This week’s cold snap puts a big focus on weather forecasts moving forward. The temperatures are expected to return to seasonal norms starting this weekend. How long will that last?
There was quite a bit of data in the wheat complex today. The USDA reported a 32% weekly slide in exports – all 274,506 metric tonnes for the week. Since June, exports are down 37 million bushels than the previous marketing year.
If that doesn’t scream “Russia,” then nothing does.
But there’s more to the Russia factor. On the same day that Russia cut its export forecast from 27 million metric tonnes to 26 million, Russia increased its 2017 wheat harvest number by 16%.
This week, we’ll be unveiling our 2018 winter wheat forecast, but before we do be sure to check out our 2017 Review of Winter Wheat Prices / Markets..
Corn Prices Follow Wheat Higher
Despite a slew of bearish data Tuesday, corn prices found gains in Chicago.
The March corn contract added 2.5 cents and closed just above $3.53.
Corn export numbers fell within range of trade expectations this morning. Japan and Mexico are still buying corn, with both country topping 7.2 million bushels for the week.
But my attention was abroad as I was trying to keep my mind off the weather.
Over in Europe, the European Commission increased its corn production figure for the current year by 100 million bushels. The new projection is 2.5432 billion bushels for the year.
Meanwhile, Brazilian corn exports are booming.
And I mean… booming.
For the month of December, Brazil shipped 157.2 million bushels. That was almost a 300% jump from the same period last year.
Later this week, our 2018 soybean forecast will be released. But take a look back at the year we just finished with our.
Soybean Prices Show Some Spirit
Finally, soybean prices did find some support this afternoon. The January contract added 3.25 cents and closed at $9.55 per bushel. The March contract fell just short of $9.65 after adding 3 cents on the day. The trade shrugged off a few lackluster figures in exports and crushing.
Exports were strong and in line with trade expectations, but still fell short of the previous week’s outflows. The USDA reported export inspections of 41.9 million bushels. The number doesn’t look too bad until you see the 58.4 million shipped during the same week last year.
The silver lining is that China continues to buy from the U.S. Despite the new restrictions on quality and foreign material, China will remain a viable customer.
Meanwhile, the November crush number hit 173 million bushels. That was slightly off from the 176 million reported in the previous month, but it still beats last year’s monthly figure.
Catch up on what’s happening with the .
2018 Grain Market Outlooks
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We’re unveiling our 2018 grain prices forecast exclusively to our GrainCents readers of these 12 crops.
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