In Chicago, the Great Thaw of 2018 continued. Wheat prices and soybean prices ticked higher ahead of tomorrow’s export reports.
Meanwhile, grain traders across all complexes digested revised numbers from the International Grains Council. Here’s your daily recap from the Chicago Board of Trade.
Wheat Prices Find Small Gains Thursday
On Thursday, March SRW contracts added 3.75 cents to close at $4.2225 per bushel. May contracts added 3.75 cents and closed a tick above $4.38. Cash SRW wheat prices added 5 cents to close at $4.26 per bushel.
Down in Kansas City, HRW contracts for March added 2.5 cents and finished the day at $4.295. The May contract added 2.5 cents and finished at $4.43.
Finally, in Minneapolis, MGEX March contracts for spring wheat declined. They closed down 1.25 cents at $6.105 per bushel. The May contract slipped 1.25 cents to close below $6.20.
Ahead of tomorrow’s export numbers, investors weighed news from the International Grains Council. Today, they slashed wheat production expectations for 2018/19 by 2% to 742 million tonnes. This would be 15 million tonnes lower than the revised global wheat production number for this year’s, 2017/18 crop of 757 million tonnes. This would match the USDA’s most recent estimate of 757 million tonnes, put out on Friday’s January WASDE grain report.
Tomorrow, we’re especially interested in the export report.
Today, we discussed how some voices in the wheat space are expecting a pop in exports based on lower supplies in Australia and higher needs for high-protein content.
But we retorted to this prediction with two elements in GrainCents.
First, farmers may be able to get a higher price here in North America using FarmLead’s Marketplace this summer than from their elevators (regardless of premium). That’s why it makes sense to start looking for deals now and know what buyers are seeking grain ahead of time.
Second, even though there exists a bullish case for exports, the scenario will require a lot of cooperation in the currency markets.
We have to keep an eye on the exchange rate between the U.S. Dollar and the Russian Ruble.
Soybean Prices Continue to Rally
In Chicago, March futures contracts added 4.25 cents to close at $9.73. The May contract added 4.25 cents and finished a tick above $9.84.
Soybean prices on the cash index added 2 cents to close at $9.31 per bushel.
In a light day of data, we received an update from the International Grains Council that was slightly bearish. The IGC raised its global soybean production number by 1 million tonnes to 349 million tonnes in 2018/19. That number is still slightly below the final production figure of 350 million tonnes in 2017/18.
Why didn’t this get more attention in Chicago?
That’s because today’s trading session centered on the impact of dry weather in Argentina.
As I noted yesterday, the USDA isn’t ready to make any reduction in soybean production in Argentina. However, other analysts have been reducing expectations. The country planted 96% of its total acreage for 2017/18, but overall acreage has declined by 200,000 acres to 44.5 million. The question of where yields will head is a topic I discussed in GrainCents earlier today.
Corn Prices Retreat By 1.5 Cents
Cash corn prices popped 6.75 cents.
Aside from that jolt that pushed futures corn prices above $3.50, it was a pretty lackluster day around corn prices.
The March and May contracts both shed 1.5 cents. March corn closed at $3.515 per bushel, while May ended the day at $3.5950. Today’s trading was largely in a holding pattern ahead of tomorrow’s report on exports. Trade estimates for tomorrow are all over the place, falling in a range from 19.5 million to 31.5 million bushels.
Today, the International Grains Council provided some new expectations on global corn output by 14 million tonnes to 1.054 billion tonnes. The increase partly reflected increased production numbers in the European Union, China and Nigeria.
Weekly ethanol inventory levels showed that production kicked back above 1.06 million barrels last week.
Meanwhile, a survey of farmers by Farm Futures indicated that 2018/2019 corn acres are expected to hit 90.1 million.