FarmLead Breakfast Brief
Monday, January 9th, 2017
“If you spend too much time thinking about a thing, you’ll never get it done.”
– Bruce Lee (US actor & martial artist)
At 7:04 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3257 CAD, $1 CAD = $0.7543 USD)
Mar Corn: +1.3¢ (+0.35%) to $3.593 USD or $4.763 CAD
Mar Soybeans: -1¢ (-0.1%) to $9.938 USD or $13.174 CAD
Mar Soybean Meal (per short ton): -$0.30 (-0.1%) to $311 USD or $412.30 CAD
Mar Soybean Oil (cents per lbs): unchanged at 34.98¢ USD or 46.37¢ CAD
Mar Oats: +1.3¢ (+0.55%) to $2.293 USD or $3.039 CAD
Mar Wheat (Chicago): +3.8¢ (+0.9%) to $4.27 USD or $5.661 CAD
Mar Wheat (Kansas City): +3.5¢ (+0.8%) to $4.37 USD or $5.793 CAD
Mar Wheat (Minneapolis): +1.8¢ (+0.3%) to $5.545 USD or $7.351 CAD
Mar Canola: +2.5¢ or +$1.10/MT (+0.2%) to $8.543/bu / $376.70/MT USD or $11.326/bu / $499.40/MT CAD
Friday’s Winnipeg ICE Close
Mar Barley: unchanged at $2.332 USD or $3.092 CAD
Mar Milling Wheat: -8.2¢ (-1.25%) to $4.865 USD or $6.45 CAD
Grains this morning are quietly mixed as the market continues to take in contract positioning, which at the beginning of the new year can a lot like the first few minutes of Black Friday or Boxing Day as a lot of action happens in a short amount of time before dissipating (AKA waiting in lines. Last week, the first trading week of the new calendar year, saw funds get longer, data that has helped the grains markets try to recoup some of their losses on Friday. Part of the reason for the sell-off was some poor export sales data that came out, but not too much should’ve been expected, considering that the sales happened over the holidays, and a lot of grain got switched to known locations like China, Vietnam, & Indonesia from unknown destinations. Also adding to the bullish fervor , index funds start to rebalance today, January 9th, how the indices are weighted, and its suggested that the indices will be friendlier to the bulls. Nonetheless, any super bullish activity won’t get to run too far and will likely get quickly roped in by the record production and ending stocks that are still on the balance sheet.
New data from the Canadian Oilseed Processors Association shows that canola crushers are continuing their hot pace, taking in over 200,000 MT of grain over the New Year’s holiday week, which would account for almost 94% of total capacity. Thus far in the 2016/17 marketing year, Canadian canola crush volumes are up almost 15% compared to this time a year ago, with nearly 4M tonnes used thus far. On Thursday this week (January 12th), we’llget the USDA’s first look of 2017 at their world agricultural supply & demand estimates, as well as American winter wheat acreage numbers. A recent Bloomberg survey of analysts and market participants pegs the land that got planted in the fall with the cereal at 34.35M acres, a 5% drop from 2016’s area and a lot more than the 20% decline first suggested back in October. Other numbers we’ll be watching for in Thursday’s report will be US corn and soybean exports (will the USDA slow things down or keep the status quo?) as well as South American production and export numbers, especially considering some of the wetter weather of late in Argentina lately.
Rains across central Argentina will continue to keep already-wet fields soggy, building up concerns that the last few fields that need to get seeded may not get planted. Producers in Mato Grosso are hoping for the rains to mostly stay away as they are getting into harvest and being able to stay in the field to combine, let alone truck the grain from field to port is important! Case in point, the main highway connecting Mato Grosso to ports is the BR-163, but because parts of it remain unpaved, when it rains, it becomes virtually impossible to drive on. As such, despite major investments by the likes of Cargill, Bunge, ADM, and others to increase port capacity, the grain just isn’t getting their and so full export potential is not being reached. That’s expected to change over the next 2-3 years as the government works on paving the remaining miles, but for this year’s Brazilian soybean and corn crops, estimated at over 100M and 88M tonnes respectively, will likely continue to be delayed. Whether this proves bullish remains to be seen, but we know that once it gets to port, thanks to the additional loading capacity there, it can get loaded quickly.
P.S. Catch us this week in Saskatoon at the Crop Production Show in Hall B!
COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.