December 6 – Wheat Prices Tumble on Bearish StatsCan Report

Blame Canada for lower wheat prices.

Statistics Canada issued a bearish production report that included higher production numbers than markets had anticipated. The report weighed on the broader grain complex, as corn prices and soybean prices dipped on the day.

While markets were caught up in the big three grains today, FarmLead made a major announcement today that will help farmers get a better price for 12 different commodity categories. More on this big development as we recap the grain trading at the Chicago Board of Trade.

Canada Hammers Wheat Prices

Statistics Canada issued a far more bearish report on wheat production than markets had anticipated. The agency reported that total Canadian production for 2017 came in at 29.984 million metric tonnes. Even though that number is about 5.5% lower than last year’s output, it was well ahead of average trade expectations. The average prediction came in at about 28 million metric tonnes. That’s about 7.0 higher than expectations.

In Chicago, December SRW wheat prices fell 7.5 cents and fell under $4.00. That December contract, which expires next week, hit $3.985. March SRW contracts dipped 7.5 cents to close just above $4.25.

Down in Kansas City, HRW contracts didn’t fare any better. December contracts dropped 8 cents to close the day at $4.06. Finally, spring wheat prices had the toughest day, falling nearly 2% on the day. March spring wheat prices dipped 12.5 cents to close just under $6.14 per bushel.

The December spring wheat contract in Minneapolis dipped 5.25 cents to close at $6.0375.

Let FarmLead Find You Better Grain Prices

Wheat prices continue to trend downward as the world faces an onslaught of exports from Russia and other Black Sea producers increase competition around the globe. The United States wheat complex will see acreage fall to a 100-year low at a time that even Mexico is turning to new markets to find cheaper grain. These are just three factors in two sentences that will set the tone for wheat prices in the year ahead.

There are dozens of factors affecting wheat once you break the complex down into different classifications of grain. The good news is that FarmLead has you covered. We’ve just released a secret weapon for grain traders and producers called GrainCents.

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Soybean Prices Follow Wheat Lower

Statistics Canada did it again to U.S. prices. The agency reported a bigger than expected uptick in canola production for our neighbor to the north. The agency reported total canola production at 21.313 million metric tonnes. The figure was an 8.7% jump from last year’s crop.

Meanwhile, Canadian soybean production was 16.6% higher than 2016 production at 7.717 million metric tonnes.

Cash prices for soybeans pushed higher, but it wasn’t a positive day for Chicago trading. The January soybean contract dipped 5.75 cents to close the day just under $10.03. The March 2018 contract shed 5.75 cents to close under $10.15.

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Corn Prices Dip Again

Corn prices didn’t fare as poorly as other contracts in Chicago. The December corn contract shed 0.5 cents to end the day just above $3.39. The March 2018 contract dipped 1 cents to finish a tick under $3.53. We saw some interesting data on both sides of the U.S.-Canadian border. First up, StatsCan reported that Canada’s 2017 production for the crop came in at 14.095 million metric tonnes.

That is nearly a 7% jump from last year and was in-line with analysts’ expectations.

While that news was bearish, we did see some bullish numbers from the Energy Information Administration. This week’s ethanol report showed a 42,000 barrel per day increase in output.

We’re now producing 1.108 million barrels per day.

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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