April 17: Wheat Prices Rebound after Crop Progress Report

Wheat prices and soybean prices saw small gains a day after technical selling pushed both sectors down. Markets continued to digest Monday’s crop progress and quality from the USDA that showed delays in American corn and spring wheat planting. In addition, the agency showed that U.S. winter wheat quality remains far behind last year’s crop and the 5-year average.

Here’s our daily recap of grain prices from the Chicago Board of Trade.

Wheat Prices Rise Across the U.S. 

A day after technical selling fueled a big selloff in Kansas City and Chicago, winter wheat prices clawed back a few pennies. SRW wheat contracts for May added 4 cents to close just above $4.66. The July contract added 2.5 cents to end the day at $4.815.

In Kansas City, the HRW contract added 2.5 cents to close at $4.805. The July contract added 2.5 cents to close the day at $4.995.

The uptick came a day after a mixed crop quality report. Winter wheat crop is coming out of dormancy. It’s sitting at 9% headed as of April 15. That figure is one point behind the average pace and well behind the 18% pace from last year. The agency said that 31% of the winter wheat crop was rated good to excellent (G-E) as of April 15. That number was up a point from 30% GE on April 8. The percentage of crops rated poor to very poor increased from 35% to 37%.

The other positive news today came from Germany. According to cooperative association Deutscher Raiffeisenverband, Germany’s winter wheat production is pegged to decline by 3%. The decline was fueled by a downturn in acreage. Though yields were expected to rise, total production is pegged at 23.4 MMT.

Finally, in Minneapolis, spring wheat contracts showed some positive gains on the day. The May spring wheat contract added 5.75 cents to close at $6.125. The July contract added 5 cents to close the day above $6.21. Delays in planting have been pronounced across South Dakota and other key planting regions.

The agency said that spring wheat is just 3% planting. That is well behind the average of 15%.

Soybeans Find Small Gains on Tuesday 

The May soybean contract added 4 cents on the day to close at $10.46 per bushel. The July contract added 4 cents and closed just above $10.57 per bushel.

A light day of data saw buyers come in to scoop up soybeans after a weak day of trading Monday.

Corn Prices Retreat Despite Planting Delays 

The May corn contract shed 2.25 cents to close the day just above $3.80 per bushel. The July contract dipped 1.75 cents to close just above $3.89 per bushel.

The tensions between the United States and China accelerated on Tuesday. China announced it would slap U.S. sorghum shipments with tariffs ranging as high as 179.6%.

This news has raised concerns about the oversupply of the crop in the U.S. The United States is expected to produce 364 million bushels (9.24 million mt) of sorghum. Total exports are pegged at 245 million bushels (6.22 million mt). The question is where all this sorghum will go if China purchases the overwhelming amount of this crop.

The U.S. will hope that Mexico, Japan, Spain, and South Africa increase their imports. However, it’s likely that a lot of this crop will end up being shifted to ethanol production.

Yesterday, the USDA said that U.S. corn planting is sitting at 3% complete.That was behind last year’s pace of 6% and the five-year average of 5%. We’re still sitting in an environment where planting is sitting at 0% in Iowa, Illinois, and Indiana. Progress was most pronounced in Texas (60%), North Carolina (30%) and Tennessee (11%).

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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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