November 20: Wheat Prices Slump Ahead of Crop Progress Report

An ugly day of wheat prices topped the headlines at the Chicago Board of Trade.

Corn prices and soybean prices remained relatively flat, while SRW contracts fell alongside their counterparts in Minneapolis and Kansas City. Here’s our daily recap from Chicago (including an update from the weekly crop progress report. 

Wheat Prices Retreat Again

December SRW wheat contracts fell 5.25 cents to close the day at $4.22. The March 2018 contract shed 5 cents to close the day at $4.385. December HRW contracts in Kansas City slipped 6.25 cents to close the day a tick below $4.26.

In Minneapolis, MGEX contracts for spring wheat slipped 7.75 cents to finish the day a tick under $6.26.

Markets largely ignored news that Iraq is looking for another 50,000 metric tonnes. The Middle Eastern nation issued a tender for wheat from Australia, Canada, or the United States (set to close on Nov. 26).

A stronger U.S. dollar and lackluster exports hit the wheat complex. Last week, U.S. export figures came in at 9.5 million bushels. That figure was on the low-end of trade expectations.

The number is also sharply off from the same period last year, and lower than last week’s figure.

After the bell, markets were watching Monday’s Crop Progress Report. Analysts expectations that 54% of wheat would be rated good-to-excellent were realized. Also, the U.S. reported that 88% of the crop emerged.

But let’s not forget Russia today. Today, Russia’s SovEcon reported that wheat exports are slated to come in around 2.4 million to 3.5 million metric tonnes for November.

Post old and/or new crop wheat on the FarmLead Marketplace today.

Soybean Prices Slip Again

Soybean prices fell Monday as traders reacted to the weekly export numbers. January futures contracts fell by a 0.5 cents to close at $9.90. The March contract slipped 0.25 cents to close the day a tick above $10.01.

Last week, soybean weekly export figures came in at 78.3 million bushels. That figure was on the higher end of trade expectations for the week. While that number was positive, it was still lower than last week’s figure and the 98.3 million bushels from last year.

This afternoon, the USDA reported that the soybean harvest is 96% complete. That figure was slightly below analysts’ expectations (98%). The harvest pace is also one-point behind the five-year average.

Soybeans prices moved down alongside canola prices. Up to Winnipeg, Canola prices dropped on the day.

The January canola contract shed CAD $3.40 to close the day at CAD $516.00. The downturn came despite reports of an uptick in speculative buying last week [1]

On the global front, we’re now seeing reports that Brazilian farmers have surpassed the five-year average for the pace of planting soybeans. Both SAFRAS and AgRural have reported this, according to Agriculture.com. Climatempo says that the back-end of November and December will feature regular rainfall and strong volumes. [2]

Corn Prices Rise for the Second Day in a Row 

Ahead of Monday’s crop progress report, corn prices ticked higher. Analysts projected that the corn harvest would come in at 91% complete on the day. However, the USDA reported that the figure was one percentage point lower at 90%.

That figure is five points behind the five-year average of 95%. Today, December corn prices closed the day 2 cents higher to finished at $3.45. The March futures contract added 1.5 cents to close at $3.5650.

Today’s data centered on exports. For last week, the USDA reported exports of 24.9 million bushels. That figure was toward the higher end of trade expectations. However, that number is sharply behind last year’s 34.5 million for the same week in 2016. So far this year, the U.S. has exported 259 million bushels, a figure that is well behind the 462 million that was sold during the same start to the 2016/17 marketing year.

Prices were able to shrug off concerns about managed money and the record net-short position that has built-in 2017. All told, managers are net-short more than 230,550 contracts. 

Chickpeas, Barley and Oats 

Regular FarmLead readers know that we cover far more than corn, soybeans, and wheat trading on our Insights platform.

Over the weekend, FarmLead President and CEO Brennan Turner offered his take on where chickpeas prices will be heading into 2018.

Today, Mike Verdin offered some insight over at AgriMoney.com on what is happening up in the barley and oats markets across Canada. The premium spread of [barley] to corn is sitting at a three-year high.

Verdin recapped statements by the Canadian Farm Ministry, which said that feed barley values are set to “remain steady until 2018, before posting some additional gains.” [3]

Meanwhile, the agency noted that oat products are “moving to the U.S. at a record pace.”

As we noted last month, there isn’t much of a U.S. market for oats when it comes to buying and selling. As I explained, Iowa is home to the largest producer of cereal in the world, but it doesn’t buy any oats from Iowan farmers.

Part of our broader editorial mission to readers is to offer candid, actionable insight on where grain prices will be heading in the future. Be sure to read our latest insight on oat prices and barley prices.

You can find them at the links below. 

– WE KNOW WHO IS PRODUCING OATS, BUT WHERE ARE THE BUYERS?
– 
THERE’S SOMETHING IN MY BEER (IT’S TOO MUCH MALT BARLEY)

 

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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