August 29 – Grain Markets Looking For Lightning

FarmLead Breakfast Brief
Tuesday, August 29th, 2017

Thunder is good, thunder is impressive, but it is lightning that does the work.”
– Mark Twain (US author)

Good Morning,

At &:05 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2467 CAD, $1 CAD = $0.8021 USD)

Dec Corn: -2.8¢ (-0.8%) to $3.483 USD or $4.342 CAD
Nov Soybeans: -6.5¢ (-0.7%) to $9.348 USD or $11.654 CAD
Oct Soybean Meal (per short ton): -$0.90 (-0.3%) to $296.30 USD or $369.41 CAD
Oct Soybean Oil (cents per lbs): -0.40¢ (-1.15%) to 34.31¢ USD or 42.78¢ CAD  
Dec Oats: -2.8¢ (-1.1%) to $2.49 USD or $3.104 CAD
Dec Wheat (Chicago): -5¢ (-1.15%) to $4.23 USD or $5.274 CAD
Dec Wheat (Kansas City): -5.3¢ (-1.25%) to $4.203 USD or $5.239 CAD
Dec Wheat (Minneapolis): -6.3¢ (-0.95%) to $6.58 USD or $8.203 CAD
Nov Canola (Winnipeg): -10¢/bu / -$4.40/MT (-0.9%) to $9.052/bu / $399.13/MT USD or $11.285/bu / $497.60/MT CAD

Yesterday’s Winnipeg ICE Close
Oct Barley: unchanged at $2.533 USD or $3.157 CAD
Oct Durum Wheat: unchanged at $6.68 USD or $8.328 CAD
Oct Milling Wheat: -8.2¢ (-1.2%) to $5.436 USD or $6.777 CAD

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Grain Markets Looking For Lightning

Yesterday, we were setting up the FarmLead booth at the Farm Progress Show when lightning struck.

It’s not that I was struck, or any one around us was, but a storm headed our direction, and the announcement was made: “Head to your vehicles.”

After all, we’re at an outdoor event where there’s a ton of poles, equipment, and steel surrounding you.

Yeah, the truck felt a bit safer.

I’ve learned over the years that Mother Nature isn’t to be fooled around with at any time.

If you disagree, there’s more than a few images from Texas where Tropical Storm Harvey can make you think twice. [1]

The grain markets seem to be looking for their lightning strike. Things are trading range bound to lower as we head into the last few days of August and Harvest 2017 starts picking up speed.

Yesterday, as Garrett mentioned in Grain Markets Today, prices headed lower. There was a lack of buying interest despite the buzz about how Harvey may impact river barge traffic and export traffic.

In yesterday’s Breakfast Brief, I mentioned how the Gulf of Mexico ports accounts for a lot America’s corn, soybean, and wheat exports. Cattle prices are certainly heading higher as rain affects hundreds of operations. [2]

This morning though, grain prices are all lower. This despite the US Dollar being lower, trading around levels not seen since January 2015.

Also of note is canola dropping below its psychologically-significant level of $500 CAD / metrictonne.

Crop Conditions Report

The USDA’s usual Monday afternoon crop progress report came out showing that corn crops are behind regarding maturity. [3] The percentage of the corn field at the dough, dent, and mature stages are all behind their 5-year averages. The portion rated good-to-excellent (G/E) stayed at 62% though.

US soybeans crop development is on an average pace with G/E ratings improving by 1 point from last week to 61%.

The US spring wheat has accelerated, showing 76% of the crop has been cut. Compare this to the 5-year average of 66%.

It’s a similar story in barley as 83% of US fields have been cut, compared to the usual 73% by now. The US oats harvest is a bit behind schedule though at 86% combined, versus an average of 90% by the last weekend of September.

In Manitoba, Harvest 2017 is hitting full speed, as per their most recent crop report. [4] Yields for winter wheat are ranging from 50 – 80 bushels per acre while fall rye is coming off at 75 – 110 bpa . Spring wheat is running 50 – 95 bpa , barley at 75 – 120, and oats at 100 – 180 bpa .

The yield monitors when combining peas in Manitoba are showing 50 – 90 bpa while canola is coming off at a range of 40 – 60 bushels per acre.

There will continue to be a lot of debate about the size of the canola crop this year in Canada. One thing that’s hard to argue though is the first fields often bring the best yields.

Sales at Harvest?

Yesterday I had a conversation with a producer who’s getting into the thick of Harvest 2017 and finding that bin space may be an issue. I never like making sales at harvest time. However, these sort situations do happen (and usually it’s a good thing if we’ve got a bigger crop than available bin space).

Given that he (and I) are optimistic that prices could increase for some his crops (lentils, peas, canola, and durum wheat), trying to limit these harvest time sales is a must.

With not a lot of production forward-contracted this year, my recommendation to the farmer was to look at the crop that will bring in the largest volume and consider making sales from that.

For spot movement off the combine for the likes of canola, net-back-to-the-farm-gate prices are still sitting above $10.50 (or about $10.75 delivered) in this producer’s area in southwestern Saskatchewan. Relatively-speaking, that’s a good price. Also, we’re talking about selling a couple of loads, not the entire harvest.

If you think you’re going to find yourself in a similar storage situation, my advice is to pick the crop that will bring in the largest number of bushels or tonnes this year and sell from that pile first. It will have a smaller impact on your average sales price.

Right now, we think it’s especially healthy to consider selling feed grains and winter cereals.

Post a couple of loads on the FarmLead Marketplace and let’s find you a great price to clear up some bin space.

To growth,

Brennan Turner
President/CEO | FarmLead
1-855-332-7653 (Toll-Free)
@FarmLead (on Twitter)

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.

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