February 14: Wheat Prices Find Little Love on Valentine’s Day

Wheat prices dipped for the second straight day in Chicago as profit taking dominated the trading session. Meanwhile, corn prices and soybean prices continued to rise thanks to weather concerns down in South America.

Let’s take a look at what drove trading today and where wheat prices and more finished on Wednesday at the Chicago Board of Trade.

Wheat Prices Slump on Valentine’s Day

Mark it two straight days of losses for wheat prices. In Chicago, March SRW contracts dropped 5 cents to finish just under $4.56. The May contract shed 4.5 cents and closed above $4.69 per bushel.

Meanwhile,March HRW wheat prices fell 5.25 cents in Kansas City. That contract finished the day a tick above $4.69. The May contract shed 4.75 cents to close under $4.70 per bushel.

Today, it was all about profit taking. Tomorrow’s export report could provide a few surprises, and traders wanted to get their gains now in case something significant happens. Trade estimates are spread across a wide range — 200,000 MT to 450,000 MT — for the week ending February 8.

American exports are taking a backseat to Canada and Russia. In France, AgriMer slashed its export figure for soft wheat and increased its inventory number from 2.9 MMT to 3.25 MMT.

As we’ve explained in GrainCents, Europe has also been a significant loser in the wheat export markets, and has joined the United States as losers of market share.

With that in mind, Ukraine wheat exports are also down 9% so far this marketing year.

Soybean Prices Rock Again

Soybean prices shot higher again Wednesday.

While there wasn’t another double-digit jump, anyone who is long soybeans was happy to add another 5.5 cents for the March and May contracts. The March contract closed the day just a tick above $10.17. The May contract closed just under $10.28 per bushel.

It’s the same old story: Argentina’s weather conditions are driving down crop size expectations. Add on overbearing rains in Brazil, and the weather premium has been strong.

Thursday will be a very critical day for the recent rally.

There are two key reports that will play a big role in tomorrow’s trade.

First, we’ll get the NOPA crush report for the month of January. Consensus expectations call for a whopping 165.51 million bushels crushed last month. That’s about a 3% jump year-over-year.

The export report will also land on traders’ desks. There’s a pretty wide spread on expectations. Trade estimates range from 450,000 MT to 750,000 MT.

Given the ongoing shift in China from U.S. exports to Brazilian exports, we’ll have to hope that weakness in Argentina has provided American exporters a steady stream of sales over the last week.

Corn Prices See Small Gain

In Chicago, March corn prices added 0.5 cents to close just above $3.67 per bushel.

May corn added 0.5 cents as well. We’re just a tick shy of $3.75 on that contract. Over at GrainCents, we’re about to set our corn price target that farmers should eye and the specific contract to make sure they capture some of this weather premium.

Wednesday doesn’t give us too much data. We did see a small drop in daily ethanol production in the United States.

But the 41,000 barrel-per-day decline is barely a dent in daily production of 1.016 million barrels. Stocks did decline by 604,000 bushels.

Tomorrow, we’re getting ready for another export report. The low end of trade estimates says that the U.S. shipped 1 million MT of old crop for the week ending Feb. 8.

Meanwhile, the reporting system showed another 123,000 MT sent to unknown destinations for the 2017/18 marketing year.

 

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.

Most Recent Posts
Aug 16 – Wheat Exports and the Trade War’s Impact
August 16, 2019 Brennan Turner
As we investigate vegetable oils and wheat exports this morning, grain prices are mostly higher as the traders buy up some bargain prices.
October 4: Corn Prices Edge Higher With October WASDE in Focus
October 04, 2018 Garrett Baldwin
Corn prices ticked higher Thursday as traders and analysts began to speculate on next week’s release of the October WASDE report.
Accounting for Weather Ahead of Corn & Soybean Plant 2019
March 18, 2019 Brennan Turner
While the trade war is still grabbing a lot of headlines, it's the recent volatile weather that is starting to help grain prices improve.