August 30 – No News is Good or Bad?

FarmLead Breakfast Brief
Wednesday, August 30th, 2017

“It’s amazing that the amount of news that happens in the world every day always just exactly fits the newspaper.”
– Jerry Seinfeld (US comedian)

Good Morning,

At 8:00 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2542 CAD, $1 CAD = $0.7973 USD)

Dec Corn: +0.3¢ (+0.05%) to $3.49 USD or $4.377 CAD
Nov Soybeans: +0.8¢ (+0.1%) to $9.38 USD or $11.765 CAD
Oct Soybean Meal (per short ton): +$0.40 (+0.15%) to $297 USD or $372.51 CAD
Oct Soybean Oil (cents per lbs): unchanged at 34.40¢ USD or 43.15¢ CAD  
Dec Oats: +2¢ (+0.8%) to $2.485 USD or $3.117 CAD
Dec Wheat (Chicago): +2.5¢ (+0.6%) to $4.323 USD or $5.421 CAD
Dec Wheat (Kansas City): +2¢ (+0.45%) to $4.283 USD or $5.371 CAD
Dec Wheat (Minneapolis): +1.8¢ (+0.25%) to $6.62 USD or $8.303 CAD
Nov Canola (Winnipeg): +2.7¢/bu / +$1.20/MT (+0.25%) to $9.041/bu / $398.65/MT USD or $11.34/bu / $500/MT CAD

Yesterday’s Winnipeg ICE Close
Oct Barley: unchanged at $2.517 USD or $3.157 CAD
Oct Durum Wheat: -19.1¢ (-2.3%) to  $6.488 USD or $8.137 CAD
Oct Milling Wheat: -10.9¢ (-1.6%) to $5.316 USD or $6.668 CAD

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No News is Good or Bad?

We spent a beautiful day in Decatur, IL yesterday with about 45,000 other ag industry people at the US Farm Progress Show. We continue to hear how farmers are biding their time and are looking for better basis or cash values.

As such, it’s not hard to understand why we’re seeing lots of farmers sign up on FarmLead (it’s free!) In August alone, more than 600 new farmers will have been added to the Marketplace.

If you’re in Decatur for the Farm Progress show, stop by in the main Various Industries Tent in the middle of the show grounds.

For grain markets, prices continued to dip yesterday on the futures board. Basis levels continue to be pressured by harvest and plenty of unpriced old crop bushels.[1] Grain prices are rebounding this morning on some commercial bargain buying.

Carl Icahn continues to kick around in the biofuels debate, continuing to suggest that fuel blenders, not refiners, should bear the financial burden of buying RIN credits to satisfy government-mandated quota numbers.[2]

Seems like if Carl Icahn isn’t in the news, he feels irrelevant and needs to get back out there (really, you could argue that’s the definition of activist investors).

Slower Weather Picking Up?

The last couple weeks have brought some decent rains and solid heat.

We’re heading into that time of year when there’s not a lot of action. Any weather factors are really the focus. BAMWx.com says that the possibility of frost in the Corn Belt could start as early as next week on September 6th.[3]

Both Garret, in his Grain Markets Today, and I, in my Breakfast Brief yesterday, highlighted the delay of the US corn crop’s maturity. Probably the most susceptible are those crops in northern and western areas of the Midwest.[4] Considering this factor, if frost were to hit, it usually results in harvesting crop that’s either damaged or at higher moisture.

Elsewhere in the world, a couple of the weather impacting agricultural production include:

  • Heat in Ukraine negatively impacting production
  • Central India getting some moisture finally after missing monsoon rains
  • Australia’s August rains were much better than that seen in June and July and are helping crops

StatsCan Production Report

Statistics Canada will come out tomorrow at 830AM EDT with their first estimates of the Canadian crop. As such, we’ll be publishing the Breakfast brief a little bit later tomorrow to accommodate the results.

The numbers from StatsCan is the result of surveys done in late July. Crops have gotten some rain since then, already suggesting that whatever StatsCan may come out with could be, in fact, too low.[5]

Pre-report guesstimates by traders and analysts put the Canadian total wheat crop somewhere between 22.8 and 27. 8 million tonnes. Canada’s Ag Ministry says the crop is closer to 27.3 million tonnes while USDA is currently at 26.5 million. Previous surveys of the trade by Reuters and Bloomberg pegged the crop at 26.2 and 26.4 million tonnes.[6]

For durum, the trade’s range of estimates is 4.2 – 5.3 million tonnes. A recent Bloomberg survey had an average of 5 million tonnes. Ag Canada is forecasting 5.1 million tonnes off of average yields of 36 bushels per acre. This would be a 5-year low and well off last year’s 7.76 million-tonne crop in the Great White North.

Considering that the US durum crop is likely only to come in at 1.39 million tonnes (about half of last year’s crop), we strongly recommend harvesting your crop and getting it tested. Easily order both US and Canadian grades from multiple independent labs on GrainTests.com. Worth also checking out is the FarmLead grain sampling cheat sheet found here.

For canola, the range of estimates ahead of tomorrow’s report are 17 – 19.5 million tonnes. AAFC recently called for 18.6 million, while Lanworth is at 18.4 million, Oil World is below 18 million, and I’m at 19 million tonnes.

For barley and oats, the pre-report range of estimates are 6.7 – 7.75 million tonnes and 3.1 – 3.6 million tonnes respectively. Last year’s Canadian barley crop was 8.78 million tonnes while the oats harvest was worth 3.15 million tonnes.

For flax, 500,000 – 625,000 MT is the estimates range ahead of tomorrow’s report. Rounding it out, peas are estimated to be 3.4 – 4 million tonnes. I think the numbers will be closer to the top end for both crops.

Much like the USDA reports, we’ll take them with a grain of salt considering were still working to get a crop off. Regardless of what StatsCan says though, at least it’s news.

To growth,

Brennan Turner
President/CEO | FarmLead
1-855-332-7653 (Toll-Free)
www.FarmLead.com
@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.

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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