As is often the case, sharp reductions of grain prices can follow with a modest technical bounce in the next session. Monday’s slide set the stage for potential Tuesday gains, but not all crops benefited. Soybeans grabbed gains of about 0.5%, as did Chicago SRW futures. But other wheat contracts sagged again, and corn ended Tuesday fractionally lower.
Wednesday’s weather will feature plenty of cooler-than-normal temperatures in the central U.S., although warmer temperatures are possible to round out the week. Tuesday into Wednesday, the eastern Corn Belt and parts of Iowa and Minnesota could see some light to moderate rainfall. Further out, most of the country will see some measurable precipitation between now and March 27.
A federal spending bill that finances the government through September must be signed by Friday, but Wall St. isn’t jittery about those prospects just yet, with the Dow up 47 points in late morning trading to 24,738. Energy prices rebounded Tuesday, anchored by nearly 3% gains in crude oil prices on supply concerns from both the Middle East and Venezuela. The U.S. Dollar also firmed moderately.
It’s the first day of spring, as well as National Agriculture Day, with numerous industry groups participating in “thank a farmer” campaigns on social media, and with President Donald Trump making an official proclamation to mark the occasion.
Corn prices stumbled on some technical selling, but another large export sale kept those losses minimized. May futures slipped a half-cent to $3.7450, while July futures fell 0.75 cents to $3.8250.
After a sharp decline in prices Monday, slow farmer sales held corn spot basis bids mostly steady Tuesday. Prices at Midwestern ethanol plants were mixed, however, with an Indiana location up 1 cent, while an Iowa location dipped 4 cents lower.
Private exporters reported to USDA the sale of 4.3 million bushels of corn for delivery to Peru during the 2017/18 marketing year, which began September 1. It was the third large corn sale reported so far this week.
U.S. Secretary of Agriculture Sonny Perdue said Tuesday he hopes the Trump administration can avoid putting a cap on RIN prices by expanding the sale of high-ethanol gasoline blends year-round, which he said would increase availability of the tradable credits, “guiding RIN prices down.”
Ahead of China’s target for 10% ethanol use in its fuels by 2020, the country’s top oil refiner has been purchasing ethanol and seeking approval to blend it ahead of that deadline. On the production side of the equation, China hopes to nearly double its output of ethanol by converting 157.5 million bushels of corn annually.
Japan is increasingly using corn as the primary ingredient in its animal feed production, now accounting for 47.9% of the total volume, up from 47.4% in December 2017 and 46.1% in January 2017.
Preliminary volume estimates were for 334,162 contracts, significantly down from Monday’s final count of 439,900.
Soybean prices found the technical bounce it was looking for after incurring big losses on Monday. May futures added 5.75 cents to $10.2825, while July futures rose 5.5 cents to $10.39.
Soymeal also finished slightly higher, with soyoil futures falling 1%. Slow farmer sales gave Canadian canola futures a small price bump of less than 0.5%.
Soybean spot basis bids were largely unchanged Tuesday, after prices dropped dramatically Monday, slowing farmer sales. The only Midwestern change reported was a 2-cent drop at an Illinois river terminal.
A report from USDA indicates Chinese soybean imports could reach 3.674 billion bushels in the 2018/19 marketing year.
Cargill’s supply chain president Gert-Jan van den Akker said Tuesday his company estimates Argentina’s soybean crop production is down to an estimated 1.470 billion to 1.653 billion bushels. Initial estimates began at 2.094 billion bushels; however, Argentina’s soybean crop has been since compromised by four months of significant drought.
Preliminary volume estimates were for 118,525 contracts, nearly half of Monday’s final tally of 231,898.
Wheat prices found some support from short-covering after hitting a seven-week low, but prices moved unevenly depending on wheat type. Chicago SRW futures fared the best, with May futures adding 2.25 cents to $4.53. May Kansas City HRW futures ended the day unchanged at $4.53, meantime, and May MGEX spring wheat futures continued its slide – down another 3.25 cents to $5.9325.
Russian wheat exports were nearly 91.9 million bushels in January 2018, compared to 69.8 million bushels the year prior.
The United Arab Emirates has purchased 1.1 million bushels, likely sourced from Russia, in a tender that closed last week.
China has sold 5.3 million bushels of its state wheat reserves at auction on Tuesday, representing 6.75% of the total amount available for sale.
Algeria’s state grains agency (OAC) issued a tender for durum wheat from optional origins for May shipment. The deadline for bids is March 22, and OAC does not disclose additional details of the tender.
Egypt’s state news agency reports the country has enough strategic wheat reserves to last another three months, after a March 15 purchase of 8.8 million bushels of wheat from Russia and Romania.
Jordan has issued another international tender to buy 3.7 million bushels of hard milling wheat, sourced from optional origins and closing March 27. Jordan has issued numerous weekly wheat tenders but has made no purchases since December 20, 2017.
Preliminary volume estimates were for 144,712 CBOT contracts, down around 20% from Monday’s final count of 182,837.