January 9: Wheat Prices Rise Ahead of Friday’s WASDE Report

The threat of another cold-front across the United States pushed wheat prices and corn prices higher Tuesday. But soybean prices just couldn’t keep up.

Grain prices continue to trade all over the map thanks to the latest wave of predictions and prognostications from trading analysts.

Here’s our daily breakdown of grain trading from the Chicago Board of Trade.

Wheat Prices Rebound

Chicago wheat prices rebounded Tuesday. Traders had feared a rise in global stocks heading into this Friday’s WASDE report. However, the weather dial is generating greater uncertainty over the health of the winter crop.

March SRW contracts added 4.5 cents to close a tick above $4.32. The May contract added 4.75 cents and finished just above $4.45. The Brugler Report reports that analysts are expecting winter wheat acreage to come at 31.307 million acres. That would be a decline from the 32.696 million acres previously forecasted.

Down in Kansas City, the hard-red winter contracts showed larger gains. The March contract added 5.75 cents and finished at $4.39 per bushel. May HRW contracts added 5.25 cents and closed at $4.525.

Finally, in Minneapolis, spring wheat contracts showed some nice gains. The March contract added 5.25 cents to close just under $6.31 per bushel. The May contract added 5.25 cents and finished the day just under $6.36.

Markets got a little bit of a boost thanks to reports of a possible deal out of Japan.

Japanese buyers are looking for 3.4 million bushels of several varieties. They’re looking to source from the U.S. and Canada, and it appears that no variety isn’t in the tender. Up to two-thirds of this deal could come from the U.S., which would be a positive development.

As I noted recently in GrainCents, U.S. exporters could soon face additional pressures in the Japanese markets due to a variety of factors that have been underreported in recent months.

March Corn Prices Flirt with $3.50

Another Groundhog Day for me in the corn markets.

The March contract finished at $3.49 thanks to a 1.75-cent gain on the day.

May corn prices added 1.75 cents and finished just above $3.57 per bushel.

On the international front, we’re keeping an eye on South America and South Africa.

In South Africa, we’re eyeing significant delays to corn planting. Grain SA says that just 70% to 75% of the crop has been planted, and that could lead to a sharp decline in production from last year’s record crop.

Next, according to reports, one Brazil ag firm believes that Brazil’s first crop could decline from current estimates. It’s a topic we discussed in the 2018 corn outlook.

We’re seeing numbers ranging from 93.0 million to 93.5 million metric tonnes. That’s a noticeable cut from the December WASDE report, which forecasted 95 MMT.

Soybean Prices Go In Reverse

Finally, soybean prices fell ahead of this week’s WASDE report.

The reason is simple: People don’t believe that Argentina’s planting delays are going to hurt its production or ending stocks figure. In fact, we’re seeing several reports from private firms that production could be as much as 2% higher than previous estimates.

That will certainly make the inventory pressures in the market even more challenging.

But one thing is certain: Chinese demand is still booming.

Brennan tackled the mighty feat of breaking down the sheer size of Chinese soybean demand in the year ahead over at GrainCents on Monday. Rising livestock demand has made for much higher expectations in the soybean space.

The challenge for U.S. farmers is from where all this grain will originate.

Brazil is awash in soybeans and the USDA has saddled American producers with stricter rules on foreign materials for shipments heading to China.

This is just one of the major factors that will impact soybean prices in the months ahead. For anyone trying to determine when opportunities will emerge for sales, we’ve put together an outlook on soybeans in 2018.

It’s for GrainCents subscribers only, and trust me, this is the most comprehensive report on soybeans you’ll find available to farmers and traders on the market today.

The Week Ahead

On Wednesday and Thursday, Grain Markets Today will be on Holiday. We will return with a full recap of the WASDE report on Friday and offer our additional insight on other events on the market. Stay up-to-date on events in the global grain markets by following GrainCents and the Breakfast Brief.

Enjoy your evening.

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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