MarketsFarm — For the most part, grain prices on the Chicago Board of Trade (CBOT) were pretty much unaffected by the U.S. Department of Agriculture’s (USDA) monthly supply and demand estimates released Friday.
While wheat prices saw support due to a reduction in global wheat supplies from 2021-22 as well as dry conditions in the U.S. southern Plains, corn and soybean prices remained steady after the report’s release. However, there were other underlying factors traders accounted for.
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Terry Reilly, senior agriculture futures analyst for Futures International in Chicago, said estimates for corn and wheat exports from Ukraine in 2021-22 (reduced to 23 million and 19 million tonnes, respectively) were in line with expectations.
“Some of the trade thought they would be a bit lower,” said Reilly. “But we are seeing some Black Sea shipments trickle out of Ukraine and Russia is still exporting wheat… A lot of traders shrugged off the numbers on Black Sea concerns.”
He added that traders currently have an eye on a rise in import tenders in the wheat market and whether or not China will book fresh cargoes of corn and soybeans.
Meanwhile, the resolution to a grain transport strike in Argentina seems far away just as the soy and corn harvest gets into full swing. However, corn- and soybean-growing areas in South America were treated well by the weather.
“South America got some beneficial rain last weekend,” said Reilly, noting that the moisture should help ease traders’ minds on the state Argentina’s soybean crop and the second corn crop in both Brazil and Argentina. He also has his eye on weather conditions in North America, as well.
“Here in the U.S., we still have drought conditions in the western Great Plains which are adding to nervousness that some of the corn will go in (for planting) a little bit later. For winter wheat, we only saw a modest (improvement) in wheat conditions on (April 11). We’re still looking at a problem for U.S. production.”
As for the next few weeks, Reilly expects choppy trade and a potential rise in wheat and corn prices due to the Russian invasion of Ukraine.
“For wheat, anywhere from $10.50 to $12 (per bushel) for the nearby Chicago contract [all figures US$]. For the corn market, I wouldn’t rule out $8, and on the downside, $7.25 if tensions start to ease. For soybeans, anywhere from $15.75 to $17.25. If we see an abrupt end to the situation in the Black Sea, I would expect prices to come down pretty hard.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
