FarmLead Breakfast Brief
Tuesday, August 23rd, 2016
“I’ve never run into a guy who could win at the top level in anything today and didn’t have the right attitude, didn’t give it everything he had, at least while he was doing it; wasn’t prepared and didn’t have the whole program worked out.”
– Ted Turner (US media mogul)
At 6:35 AM CDT in the North American futures markets:
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2903 CAD, $1 CAD = $0.7751 USD)
Dec Corn: -3.3¢ (-0.95%) to $3.393 USD or $4.377 CAD
Nov Soybeans: -4.8¢ (-0.45%) to $10.11 USD or $13.045 CAD
Oct Soybean Meal (per short ton): -$1.30 (-0.4%) to $330.90 USD or $426.96 CAD
Oct Soybean Oil (cents per lbs): -0.09¢ (-0.25%) to 33.93¢ USD or 43.78¢ CAD
Dec Oats: -0.8¢ (-0.4%) to $1.87 USD or $2.413 CAD
Dec Wheat (Chicago): -3.3¢ (-0.75%) to $4.32 USD or $5.574 CAD
Dec Wheat (Kansas City): –3.5¢ (-0.8%) to $4.365 USD or $5.632 CAD
Dec Wheat (Minneapolis): -1.5¢ (-0.3%) to $5.23 USD or $6.748 CAD
Nov Canola: +1.1¢ / +$0.50/MT (+0.1%) to $8.28/bu / $369.40/MT USD or $10.682/bu / $471/MT CAD
Yesterday’s Winnipeg ICE Close
Oct Barley: unchanged at $2.329 USD or $3.005 CAD
Oct Durum Wheat: unchanged at $5.506 USD or $7.103 CAD
Oct Milling Wheat: -2.7¢ (-0.45%) to $4.578 USD or $5.906 CAD
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Not Your Regular Program
Grains this morning are mostly lower as the market weighs some the Pro Farmer Crop Tour data against another bearish crop progress report from the USDA, and continued demand in soybeans. Oil World points out that in the period of April through August of this year when Brazil & Argentina own the chunk of business, the US has exported 2.85M tonnes to China, a massive bump from the 240,000 MT exported during the same period in 2015. Soybeans net long position continues to wane though, with it likely dropping below 100,000 lotsthis week, while net shorts in wheat went through other way, with more covering going on, helping wheat prices trek higher. From a weather perspective, little shots of rain continue to slow Harvest 2016 in North America, and more of that may be on the way for Canada-US border regions in the West through November, whereas the weather program in the East provided to you by Mother Nature could remain a little warmer than usual.
Yesterday the annual Pro Farmer Crop Tour got underway in the Midwest, with Ohio, South Dakota, and part of Nebraska on Monday’s leg. In the eastern cornbelt, which has been plagued by some drier weather, the average yield in Ohio came in at 149 bu/ac, nearly identical to last year’s 148.4 bu/ac, but with a lot of variability comparing north to the south (the USDA is currently pegging the Ohio average corn yield at 163 bu/ac). Soybean pod counts in Ohio were also below last year and the five-year average. In South Dakota, variability was also reported with an average corn yield of 149.8 bu/ac, 9.7% below the average of 160.1 bu/ac (USDA forecasting 147 bu/ac for South Dakota), while soybean pod counts were 8% lower than last year’s near-average crop. Today the tour will finish Nebraska and Indiana, and start into part of Illinois.
While the numbers from the tour are a bit variable, yesterday afternoon’s USDA crop progress report showed US corn crop conditions getting bumped up by 1 point week-over-week to 75% of the crop rated in good-to-excellent (G/E) health. The crop continues to develop ahead of last year and the 5-year average with 85% of the crop in dough stage and 40% dented. For soybeans, 89% of the US crop is setting pods (also ahead of last year and the 5-year average), with the G/E rating staying at 72%. As for the cereals, harvest has been slowed by some rains in the north but things are still above the seasonal average, with 70% of barley crops combined, 89% of oats fields harvested, and 65% of spring wheat fields thrashed as of Sunday.
While wheat prices in Canada and the US are tempering their recent gains, Russian wheat prices continue to rebound, up for the 4thstraight week as farmers aren’t parting with better quality wheat as quickly as possible, knowing that there’s less readily available high-protein product in Europe after tough rains in Germany and France (only 33% of the French wheat harvest, which is now practically finished, was rated in good-to-excellent condition). To make matters worse for their international competition, it’s been suggested that to help move all that wheat they’re producing this year, the Russian Ag Ministry is proposing dropping the export duty to zero until July 1, 2017. This would intuitively point the way for even more aggressive export activity, but would likely mean lower port prices, as traders are already accounting for this tax in their shipping programs.
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.