April 12 – Skittish Grain Markets in Post-WASDE Trade

Good Morning!

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. [1] 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? [2] 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.

To growth,

Brennan Turner

President | CEO
TF: 1-855-332-7653
@FarmLead or @GrainCents on Twitter

At 7:15 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2588
 CAD, $1 CAD = $0.7944 USD)

May Corn: -1.8¢ (-0.45%) to $3.853 USD or $4.850 CAD
May Soybeans: +2.3¢ (+0.21%) to $10.500 USD or $13.218 CAD
May Soybean Meal (per short ton): -$0.70 (-0.18%) to $379.50 USD or $477.731 CAD
May Soybean Oil (cents per lbs): -0.01¢ (-0.00%) at 31.52¢ USD or 39.679¢ CAD  
May Oats: +1.8¢ (+0.74%) to $2.393 USD or $3.012 CAD
May Wheat (Chicago): -9.3¢ (-1.90%) to $4.780 USD or $6.017 CAD
May Wheat (Kansas City): -11.0¢ (-2.13%) to $5.058 USD or $6.367 CAD
May Wheat (Minneapolis): -3.0¢ (-0.48%) to $6.280 USD or $7.906 CAD
May Canola: -$0.30 (-0.06%) to $11.864/bu / $523.10/MT CAD or $9.424/bu / $415.540 /MT USD

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.

About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.

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