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Wheat Closes Higher Friday on Russia Worries

Ukragroconsult said in a report Russia may be running low on supplies.

Wheat futures closed higher Friday on reports that Russia is running low on exportable grain, which may mean increased demand for U.S. supplies.

Ukragroconsult, the consulting agency that specializes in Ukraine and the Black Sea region, said there are signs that Russia is running low on supplies, including increased tender prices in recent months. The Russian government may offer grain transportation subsidies in a bid to pull wheat from inland areas to bolster exportable supplies, the consultancy said in a report. 

Egypt, the world’s largest importer of the grain, has turned to other suppliers including the U.S., the report said. With Russia reportedly running low, that’s a trend that may continue. 

The USDA said last month before the partial government shutdown that domestic exports would total 1 billion bushels in the 2018-2019 marketing year that ends on May 31. That’s up from 901 million the previous year.

Soybeans were higher on optimism about trade with China after it was announced one of the Asian country’s top negotiators would come to Washington later this month.  

Wheat for March delivery closed 6¢ higher at $5.19¾ a bushel, while Kansas City futures added 5¾¢ to $5.04½ a bushel on the Chicago Board of Trade.  

Soybeans for March delivery gained 3¾¢ to $9.10½ a bushel. Soy meal fell $2.50 to $314.30 a short ton, and soy oil added 0.25¢ to 28.44¢ a pound.

Corn closed up 2¾¢ at $3.79 a bushel in Chicago.

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Thursday’s Market Recap

Soybean futures plunged Thursday amid a dearth of news concerning purchases of U.S. supplies by China. 

Reports two days ago from private trading houses said the Asian nation was buying soybeans, but so far there’s been no confirmation about the purchases amid a partial government shutdown that’s left farmers, traders, and analysts without export data. 

There’s no end to the shutdown in sight after President Trump walked out of a meeting with Democrats on Wednesday. The president plans to visit the border with Mexico in a bid to drum up support for his border wall. Trump said the government will remain shut down without funding for the barrier along the southern border.

After more than two days of talks, negotiators from Washington and Beijing expressed optimism that a trade deal will be worked out. Chinese officials said Wednesday that the talks were constructive and likely will lead to an agreement, though when such a deal will be inked and what it will entail is still unknown. 

For now at least, traders don’t seem to want to get too long on soybeans until more data is made available. 

Soybeans for March delivery closed down 16¾¢ to $9.07¼ a bushel on the Chicago Board of Trade. Soy meal lost $6.80 to $316.60 a short ton, and soy oil declined 0.44¢ to 28.16¢ a pound.

Corn fell 5¢ to $3.77 a bushel overnight.

Wheat plunged 6¼¢ to $5.13¾ a bushel, while Kansas City futures declined 7¼¢ to $4.98¼ a bushel.

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Wednesday’s Market Recap

Soybeans closed higher on Wednesday amid ongoing concerns about dry weather in Brazil and on optimism over trade talks between the U.S. and China.

Central and northeastern Brazil are expected to be dry this week, which will lead to expanded crop stress in the areas, Radiant Solutions said in a report. Rains are expected in some producing states including Mato Grosso, Parana, and Rio Grande do Sul, the forecaster said. 

Prices also got a bump as two days of trade negotiations that stretched into a third day ended on a positive note. President Trump tweeted on Tuesday that the talks were “going very well” and officials from both sides said they were optimistic that a deal will be worked out. 

Ted McKinney, the U.S. undersecretary of agricultural affairs, said Wednesday that negotiations “went just fine” and that they were good for the U.S.

Negotiators have until March 1 to hammer out a trade agreement. If one isn’t finished by then, the White House has said the U.S. will raise its tariff rate on $200 billion worth of Chinese items to 25% from their current level of 10%. 

Soybeans for March delivery rose 6¢ to $9.24½ a bushel overnight on the Chicago Board of Trade. Soy meal gained $2.10 to $323.70 a short ton, and soy oil added 0.15¢ to 28.58¢ a pound.

Corn gained 2¢ to $3.82 a bushel overnight.

Wheat rose 1¾¢ to $5.19½ a bushel, while Kansas City futures fell ¼¢ to $5.04¾ a bushel overnight.  

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Tuesday’s Market Recap

Soybeans closed lower Tuesday on profit taking after prices had hit the highest in almost a month, and on somewhat dovish comments by U.S. Commerce Secretary Wilbur Ross. 

Prices earlier reached the highest level since December 12 on optimism about Chinese purchases of U.S. soybeans. Presidents Donald Trump and Xi Jinping at the start of last month came to an agreement under which the U.S. would hold off on raising its tariff rate on Chinese goods until March 1 if China would buy more agricultural products.

Both countries have made good on their promises, which underpinned prices since mid-December, leading some investors to book profits after the price increase. 

Ross said in a speech that the U.S. and China could reach a deal that “we can live with,” which wasn’t resoundingly optimistic, but showed that negotiators from both sides are willing to deal. Still, he said Monday that “there’s a very good chance” the sides will find a “reasonable” settlement. 

If a trade agreement isn’t made between the world’s two largest economies by March 1, the White House has said it will bump the tariff rate on Chinese goods to 25% from their current level of 10%. China would likely retaliate should that happen. 

Soybean futures for March delivery fell 5¾¢ to $9.18½ a bushel on the Chicago Board of Trade. Soymeal declined 80¢ to $321.40 a short ton. Soy oil declined 0.11¢ to 28.40¢ a pound.

Corn futures lost 2¢ to $3.80¼ a bushel in Chicago. 

Wheat for March delivery rose 2½¢ to $5.19¼ a bushel, while Kansas City futures added 3¢ to $5.06 a bushel. 

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Monday's Market Recap

Soybeans closed higher on Monday while grains were little changed amid cautious optimism that the U.S. and China will hammer out a trade agreement. 

Beijing said negotiators on both sides have expressed a willingness to find common ground as the world’s two largest economies work on a deal as the U.S. and China enter two days of negotiations that will conclude on Tuesday. 

Soybean exports have been suppressed due to the ongoing trade spat between Beijing and Washington. Presidents Trump and Xi Jinping came to a preliminary agreement at the start of last month under which the U.S. will delay a planned tariff hike on $200 billion worth of Chinese goods, while China said it would buy more American agricultural products. 

The government has been shut down for more than two weeks, however, making it difficult to know how many soybeans the Asian country has bought. The ongoing shutdown is showing no signs of ending as Trump and Democrats who recently took control of the House are at an impasse. 

Prices also rose on continued concerns about hot, dry weather in Brazil. Temperatures around 90°F. will expand into northeastern Brazil by early next week and to central areas in the next 11 to 15 days, Commodity Weather Group said in a report. Stress is building in central and northeastern parts of the country. 

Soybean futures for March delivery rose 2¢ to $9.23½ a bushel on the Chicago Board of Trade. Soymeal jumped $2.80 to $321.80 a short ton. Soy oil declined 0.15¢ to 28.49¢ a pound.

Corn futures were unchanged at $3.83 a bushel in Chicago. 

Wheat for March delivery fell ½¢ to $5.16½ a bushel, while Kansas City futures lost 2¾¢ to $5.03¼ a bushel. 

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