Today’s WASDE isn’t expected to show many fireworks, but grain markets are mostly lower ahead of it.
“Failures, repeated failures, are finger posts on the road to achievement. One fails forward toward success.” – C.S. Lewis (British author)
Today’s WASDE Resets Grain Markets Goalposts
Ahead of today’s WASDE report out at 12 Eastern, grain prices this morning are mostly lower, with soybeans the only grain or oilseed in the green. Today’s WASDE will do its usual job of resetting the goalposts for grain markets. Regarding what we’re watching for in today’s WASDE, South American production and US corn and soybean exports are the highest priority.
Canola prices are pulling back this morning rather sharply as the Canadian Loonie creeps closer to 79¢ USD and producer selling. This, despite oil prices up significantly this morning as it’s hard to find an oil bear anywhere. The lack of bearish interest right now could be a bad thing though as prices could jolt back down when said bears do eventually show up. 
As Garrett mentioned yesterday in the daily Grain Markets Today, wheat prices rallied on weather and crop quality concerns. Average good-to-excellent ratings across the US fell by 2 points week-over-week to just 30%. This is the lowest it’s been in the last 30 years.
Don’t Forget About the Weather
AccuWeather’s most recent forecast for spring thaw isn’t that bullish.  Warmer temperatures aren’t expected to be seen in Western Canada until later this week, and the “warming up” will be slow-going. The same thing can be said for many Northern US states, which plant similar crops as Canadian Prairies.
Looking south, Brazilian states of Parana and Mato Grosso account for about 45% of total safrinha/second crop corn production in the country. Over the next two weeks though, there is no rain in the forecast. And it’s supposed to be the wet season!
More forecasters who think said wet season could be finished, which is a bit bullish for corn – if you haven’t seen what’s going on in next door in Argentina, soil moisture is pretty important. If models are maintained, corn prices should certainly reflect this (but you definitely won’t see it in the production numbers released in the WASDE later today).
Recent GrainCents Publications
In addition to the weekly digest, that gets sent out every Sunday morning to GrainCents subscribers, here’s a breakdown of some deeper analysis pieces that we’ve published in the past four days.
• Why does the EU hate palm oil and the implications for canola;
• What happens to canola prices with less acres, worse weather;
• If hard red winter wheat is a dying crop in the US;
• What needs to be done to get Canadian durum back into Italy;
• If Algeria can be self-sufficient when it comes to durum wheat production;
• What new malt barley exports mean for Canadian prices;
• Bigger, better UK barley crop expectations in 2018;
• If barley will take a hit or not with NAFTA renegotiations;
• Whether or not desi chickpeas prices have hit the lows;
• When do peas get a harder look from China for more imports;
• Manitoban peas bucking the lower acreage trend in 2018; and,
• Which colour lentil has the best potential profit return in 2018.
China vs. USA vs. WASDE
You can read through all of the April WASDE pre-report average guesstimates, outlined in yesterday’s Breakfast Brief. Today’s WASDE though is certainly overshadowed by the trade tensions between the US and China. And as explained in yesterday’s Breakfast Brief, today’s WASDE numbers will not reflect said tension because no import tariffs are in place and even if they were, the USDA wouldn’t have been able to update the numbers quick enough.
On that thought, cooler heads in China might be prevailing. Chinese President Xi Jinping provided some commentary that will likely assuage the market’s fears. President Xi said that China is working on giving financial institutions more autonomy, in addition to reducing tariffs on imported automobiles, among other matters.
A bit of a contrast to the protectionist policies of US President Trump, no? Well, this is called politics. President Xi was quoted as saying, “In a world aspiring for peace and development, the Cold War and zero-sum mentality look even more out of place.”
Overall, there’s a lot of trade war rhetoric, but there’s also a lot of noise. Specifically, as it relates to US soybeans, Garrett argues that we should all take a deep breath here. There’s more bark than bark, and so let’s get through today’s WASDE before letting the gossip about what Xi and Trump say get the best of us.