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Afternoon Market Recap for March 22, 2018

Grain markets ignore trade war threats.

Technical maneuvering steers most prices higher Thursday

Worries over a potential trade war with China had stocks tumbling Thursday, with the Dow down more than 400 points in early afternoon trading. Here’s a look at what retaliations could occur now that President Trump has imposed new tariffs on China, announced earlier today. Wall St. jitters failed to spill over into the grain markets, however, with most prices trending higher on technical maneuvering.

Warmer weather is slowly impeding into the Plains, but most parts of the Midwest won’t experience warmer-than-normal temperatures until the middle of next week. Plenty of rain is likely across the central U.S. during the next week, meantime. 

Congress is in a race against the clock to approve its massive spending bill ahead of an imminent government shutdown, which happens at midnight on Friday if the bill doesn’t pass. Democrats are complaining lawmakers will not have time to read through the 2,232-page bill in the next two days. The House bill passed earlier Thursday, sending it to the Senate. 

Energy prices retreated from moderate gains Wednesday, and the U.S. Dollar firmed slightly.

USDA has delayed its normal weekly export sales report by one day due to snow-related shutdowns. The next report will be released at 7:30 CST on Friday.


Corn prices found some modest gains on a round of technical buying, with May prices up 1 cent to $3.76 and July prices up 1.25 cents to $3.8425. May futures have stabilized but are still parked about 10 cents lower than recent multi-month highs captured earlier in March. 

Corn spot basis bids firmed at ethanol plants by 2 to 5 cents, weakened at river terminals by 1 to 4 cents, and remained unchanged at most other Midwestern locations.

Informa Economics has reduced its forecast for 2018 U.S. corn acres from 89.179 million acres to 88.9 million acres. Farm Futures and Informa Economics are both owned by Informa PLC.

European Union corn imports for 2017/18 reached 484.2 million bushels as of March 20, which was significantly (52%) higher than the prior year’s pace.

The International Grains council predicts global grain production will level off while demand will continue to increase in 2018/19, leading to lower total stocks. The group’s latest monthly report sees global grains production reaching 2.087 billion metric tons next year, down 0.2%.

The Buenos Aires grains exchange has once again lowered its estimates for the country’s 2017/18 corn crop, this time from prior estimates 1.339 billion bushels to 1.260 billion bushels, as droughts have negatively impacted crops there for much of the growing season.

South Korea continues to purchase corn and other grains at a steady clip. Its latest purchase was for 2.7 million bushels of corn and 60,000 metric tons of soymeal in an international tender that closed Thursday. The corn is for arrival in August, with the soymeal for arrival in late September. 

Preliminary volume estimates were for 282,145 contracts.


Soybean prices shrugged off worries that the commodity could be a retaliatory target because of newly imposed U.S. tariffs on Chinese goods. May futures did fall around 7 cents immediately following President Trump’s announcement, but spent the rest of the session clawing back to unchanged at $10.2934. July futures finished up 0.25 cents to $10.4075.

Soybean spot basis bids slipped 2 to 6 cents at several river terminals but held steady at most other Midwestern locations.

If a trade war with China manifests itself over U.S. tariffs, the agricultural sector is vulnerable to retaliations. That’s especially true for U.S. soybeans if China elects to target that crop. China accounted for 43% of all U.S. soybean exports and 22% of total soybean demand in 2016/17.

Informa Economics upped its forecast for 2018 U.S. soybean acres from 91.197 million acres to 91.5 million acres – a record high if farmers match that estimate.

EU soybean imports for 2017/18 reached 338 million bushels as of March 20, which is 5% below the prior year’s pace. Soymeal imports are up 7% and palm oil imports are up 4%. 

As it did with corn, the Buenos Aires grains exchange again lowered its soybean production estimates for 2017/18 due to drought concerns. Total production is now estimated at 1.451 billion bushels, down from prior estimates of 1.543 billion bushels.

Preliminary volume estimates were for 178,381 contracts.


Wheat prices finally found some traction after sustaining heavy losses earlier in March. May Chicago SRW prices gained 2.25 cents to $4.5575, May Kansas City HRW prices were up 6.75 cents to $4.7225, and May MGEX spring wheat prices added 3.75 cents to $5.9425. 

Informa Economics now projects all-wheat plantings in the U.S. at 46.1 million acres, moving 30,000 acres higher than its January estimates.

European Union soft wheat exports in 2017/18 reached 518.1 million bushels as of March 20, which is 23% lower year-over-year. Barley exports of 157.5 million bushels, in contrast, is 6% higher than the prior year’s pace.

Tunisia has issued tenders to purchase 1.8 million bushels of durum wheat, 2.5 million bushels of soft wheat and 1.1 million bushels in feed barley. The tenders close March 23. 

Iraq has made no purchases but is still considering offers on its international tender for 1.8 million bushels of hard milling wheat. The tender closed Monday, but Iraq has until March 25 to make a purchase decision. The lowest bid on the table is for Australian origin wheat.

Japan has purchased 4.7 million bushels of wheat in a regular tender that closed earlier Thursday. About three-fourths of that total was sourced from the U.S., with the remainder coming from Canada.

Preliminary volume estimates were for 107,318 CBOT contracts, down from Wednesday’s final count of 140,457.


Corn Outlook

Soybean Outlook

Wheat Outlook



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