“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.”
– Benjamin Franklin (US Founding Father)
At 7AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3408 CAD, $1 CAD = $0.7458 USD)
July Corn: +0.3¢ (+0.05%) to $3.685 USD or $4.941 CAD
July Soybeans: +3.5¢ (+0.35%) to $9.598 USD or $12.869 CAD
July Soybean Meal (per short ton): +$1.00 (+0.3%) to $317.60 USD or $425.85 CAD
July Soybean Oil (cents per lbs): +0.04¢ (+0.15%) to 31.42¢ USD or 42.13¢ CAD
July Oats: +0.5¢ (+0.25%) to $2.183 USD or $2.926 CAD
July Wheat (Chicago): -0.3¢ (-0.05%) to $4.368 USD or $5.856 CAD
July Wheat (Kansas City): -0.5¢ (-0.1%) to $4.315 USD or $5.786 CAD
July Wheat (Minneapolis): unchanged at $5.473 USD or $7.338 CAD
July Canola: +1.6¢/bu / +$0.70/MT (+0.15%) to $8.601/bu / $379.24/MT USD or $11.533/bu / $508.50/MT CAD
Yesterday’s Winnipeg ICE Close
July Barley: unchanged at $2.241USD or $2.983 CAD
July Milling Wheat: +10.9¢ (+1.75%) to $4.729 USD or $6.341 CAD
Grains this morning are trying to stay in the green after a decent day yesterday with the U.S. Dollar falling a bit on the news of a snap election being called in the United Kingdom for June 8th and the first vote in a French Presidential election this weekend. This supported grain prices but soybeans got pressured a bit on the thought that more U.S. acres could go into the oilseed instead of corn because of the slightly rain-delayed start to Plant 2017 in North America. Nevertheless, hedge funds continued to build up their net-short position on grains last week, with more analysts pointing out that there’s more space available to go shorter, given the supply situation and if a decent planting window opens up. Canola continues to enjoy some nice strength but the levels are feeling a bit top-heavy again so if you missed the other great windows to make some sales, worthwhile to consider something now (post your next 10% block on FarmLead here). Overall, we just passed the mid-way point in April and there’s about a month left for U.S. farmers to “get-r’done” before potential yield starts to fall (based off planting dates) so most are saying it’s a little early in the game still (including me).
AgResouce is suggesting that that Brazil’s April soybean exports could top 11M tonnes, based on ship lineup and commitments thus far (commitments are up 4.5% year-over-year at 29.8M tonnes). Weather in South America is expected to be relatively benign the next 10 days with some decent dry conditions in Argentina (will help with corn and soybean harvest progress) while there’s no hot temperatures expected to hit Brazil’s safrinha corn belt. Staying in weather prospects, India is expected to get another good year of monsoon rains as the India Meteorological Department says that precipitation that will fall over the 4-month-long season that starts in June, should be about 96% of the 50-year average (last year’s monsoon was 97% of the 50-year average). This is significant for both rabi and kharif growing seasons there as the monsoon rains account for 70% of all moisture received during the year and provides water to the majority of India’s farmland. With prices below the government’s minimum support prices though, will pulse crop acreage in the Asian country come in near last year’s record. My guess today is no but it will probably align closely with the 5-year averages.
Per the Chinese National Bureau of Statistics, China’s corn acreage is expected to drop 4% YoY while soybeans area should increase by 8% as the government in Beijing switches its policies on what crops to support. This is in line with what China’s Agricultural Ministry is forecasting via their “Chinese Agricultural Supply & Demand Estimates” (sounds oddly familiar to the U.S.D.A.’s W.A.S.D.E., no?) who are forecasting Chinese corn acreage to drop 5.4% from last year to nearly 90M acres while soybean area should jump by 8.5% to 17.3M acres. By 2020, their hope is to be planting 23.2M acres of soybeans while corn acreage is supposed to drop to 82.3M acres as they try to rid themselves of the 250M tonnes of corn they’re sitting on (or a 10-year stockpiling policy that’s gone bad).
The question that everyone is asking right now is how much corn is going to get planted if it stays too wet to plant the coarse grain, and farmers are going to instead switch into more beans. There continues to be a daily battle amongst traders with the bulls arguing for a smaller amount of total area going to corn (meaning smaller production, which means a better price), whereas the bears just think it’s too early to make this call. Why? The American farmer can plant a lot of acres in a short amount of time. More specifically, the American Farm Bureau points out that in 2014, 56% of the entire corn crop got planted in the first 2 weeks of May. Further, in 2013, producers seeded 43% in the 1 week between May 19 and May 26 alone! Needless to say, if it’s even slightly close to being dry enough to get into the field, the tools, personnel, and motivation is there to plant a corn crop in the U.S. as quickly as possible.
P.S. In yesterday’s Breakfast Brief, a reader pointed out that I had production differences for Canadian lentils slightly wrong year-over-year. I initially wrote that AgCanada’s estimate of Canadian lentils output in 2017/18 of 3.1M tonnes would be a 11% from 2016/17, but it is only dropping 4.6% from last year’s crop (I misread AgCanada’s March estimate as last year’s production number!)
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