December 7: Woes Continue for Wheat Prices

Wheat prices fell for their fourth straight day as markets continue a sell off.

The performance of trading in Chicago was a long way from what happened in New York. Positive economic data included a surprise decline in U.S. jobless claims and a strong uptick in U.S. crude prices. Though corn prices dipped on the day, we still saw some optimism from news of record corn ethanol production.

Here’s more of our daily recap in grain trading from the Chicago Board of Trade…

Wheat Prices Hit Contract Lows

SRW contracts in Chicago and HRW contracts in Kansas City hit contract lows as investors continue to pile out of their positions. Prices continue to slide on news of rising production and export numbers from the Black Sea, rising inventory levels around the globe, and weaker export numbers than analysts had expected.

In Chicago, December SRW contracts shed 4.25 cents to finish the day a tick above $3.94. The HRW contract for December fell 2.75 cents to finish a tick above $4.03 in Kansas City.

The numbers weren’t too good either for spring wheat contracts up in Minneapolis. Prices for December shed another 5 cents on the day. Today’s downturn have pushed front-month contracts below $6.00 for the first time since June 2017.

We can blame a number of different factors for the downturn. U.S. wheat export sales came in lower than analysts’ expectations for the week by roughly 1 million bushels with a final number of 11.9 million bushels. U.S. exports are now well behind USDA forecasts and will require a big uptick to meet the agency’s expectations.

We’re watching some weak export numbers out of Europe as well. France’s soft wheat numbers for October came in at the lowest monthly level of the marketing year so far. Overall EU soft wheat exports are off about 23% compared to last year.

Corn Prices Follow Wheat Lower

The December corn contract dropped another 0.5 cents to close the day a tick below $3.39. The March 2018 contract dipped 1.25 cents to end trading Thursday at $3.5150. The challenges are continuing from November, which we covered extensively earlier this week.

USDA export numbers showed sales of 34.5 million bushels.

It’s a 46% jump from last week. However, the figure was much lower than analysts had expected for the week.

The big news today came out of Washington D.C. where President Trump met with leaders of the USDA, EPA and other regulatory bodies to discuss the reneweable fuel standard.

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Soybean Prices Dip from Three-Month High

Soybean prices have been moving higher and bringing profits for farmers.

As Angie Setzer told FarmLead readers this week, $10.00 per bushel is offering farmers an opportunity to help ensure that they get some black ink on the balance sheet this year.

Today, stronger export figures and concerns about Brazilian weather failed to stop profit taking in Chicago. The January contract dropped 10.75 cents to end the day at $9.92. The March contract fell 10.5 cents and ended the day a tick above $10.04.

We saw U.S. export sales come in at 76.7 million bushels in old and new crop. The figure was double what we saw last week and crushed analysts’ expectations of 48.7 million bushels.

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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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