Grain markets are in the red this morning as volatility continues to be the name of the game in post-WASDE trade.
“I used to be scared of uncertainty; now I get a high out of it.” – Jensen Ackles (American actor)
Skittish Grain Markets in Post-WASDE Trade
Grain markets are in the red this morning as volatility continues to be the name of the game since we got new WASDE numbers. Put another way, the market continues to digest updated supply and demand numbers from Tuesday’s WASDE, as well as weather reports.
Geopolitical risk continues to weigh on markets, but the market has taken a bit of a breather (maybe our position on why a trade war is unlikely is being received well!). That being said, the Russian rouble fell to its lowest level in nearly 18 months as Twitter threats from President Trump has escalated tensions.  At the same time, oil prices are trading at their highest level since December 2014!
Grain prices fell on Wednesday, as recapped by Garrett in his regular Grain Markets Today column. Wheat prices led the grain markets lower yesterday and are doing the same again this morning, despite some colder temperatures and even snow in the forecast for many major wheat-producing areas.
The most interesting thing we’ve seen the past two days is the announcement of US soybeans being exported to Argentina. This is pretty significant as it signals either one of two things: either the Argentine soybean crop is worse than we think, or some savvy traders are arbitraging the heck out of the market.
Canola prices have pulled back significantly in the past two days (about $10 CAD /metric tonne) as farmer selling and pressure from the Canadian Loonie climbing to 79.5¢ USD has pressured any bullish feelings. In Monday’s Breakfast Brief, we previewed the April WASDE report, but I also said that canola prices were feeling extremely top-heavy and explained why.
Will the recent run-up in canola prices this past week be enough though to push canola acres to a record 24 million?  Or will the weather limit the real number of acres?
WASDE Left a Mark on Tuesday
After the USDA released their numbers, Garrett did an immediate recap of reactions to the WASDE report (for the record, he does this after each report so keep that in mind for next month!). A couple of the notable data points that I saw in the WASDE included:
• Russia’s wheat exports raised by 1 MMT to 38.5 million (a record);
• Global wheat stocks were raised by 2.3 MMT to 271.2 million (a record and 3 million more than what the market was expecting);
• Brazilian soybean production was raised by 2 MMT to 115 million ( a record);
• Brazilian soybean exports were raised by 2.6 MMT to 73.1 million (a record);
• Argentina’s soybean production number by 7 MMT to 40 million (the average pre-report guesstimate was 42.6 million);
• Global soybean stocks were cut by 3.6 MMT to 90.8 million (larger-than-expected cut);
• Brazilian corn production lowered by 2 MMT to 92 million (market expected 92.7); and,
• Argentine corn production was cut by 3 MMT to 33 million.
Once the WASDE dust had settled, Garrett reported in his Tuesday Grain Markets Today that alongside a ton of charts, soybean prices ended up being the best performer.
New FarmLead Tools
One of the more interesting things about grain markets is the recent release of one of our newest features on the FarmLead Marketplace: Basis Posts for Sellers.
For the past few months, credit-verified grain buyers on FarmLead have been able to post new bids and negotiate using just a basis value. Now grain sellers (farmers) can do the same thing on the FarmLead Marketplace. This means that you can post a basis value for any buyer to come in and negotiate with you on.
Effectively, FarmLead is the first company to offer negotiations on basis! Try it for yourself in our new, redesigned Post New Offer page on FarmLead.
If you haven’t logged into FarmLead in a while, you’ll notice that the Search tool has also been revamped! There’s plenty of features on FarmLead that are going to help your grain trade be easier and easier to manage.