Dec 9 – Moving Anything?

FarmLead Breakfast Brief

Friday, December 9th, 2016

“If everyone is moving forward together, then success takes care of itself.”
– Henry Ford (US industrialist)

Good Morning!
At 7:00 AM CDT in the North American futures markets (*not cash prices*):

(all prices in dollars per bushel unless otherwise indicated)

$1 USD = $1.3177 CAD, $1 CAD = $0.7589 USD)

Mar Corn: +1¢ (+0.3%) to $3.595 USD or $4.737 CAD
Jan Soybeans: +3.8¢ (+0.35%) to $10.308 USD or $13.582 CAD
Jan Soybean Meal (per short ton): +$2.30 (+0.75%) to $316 USD or $416.39 CAD 
Jan Soybean Oil (cents per lbs): -0.15¢ (-0.4%) to 37.11¢ USD or 48.90¢ CAD 
Mar
 Oats: +1.8¢ (+0.75%) to $2.248 USD or $2.962 CAD
Mar Wheat (Chicago): -0.5¢ (-0.1%) to $4.078 USD or $5.373 CAD
Mar Wheat (Kansas City): -1.3¢ (-0.3%) to $4.035 USD or $5.317 CAD
Mar Wheat (Minneapolis): +0.3¢ (+0.05%) to $5.313 USD or $7.00 CAD
Jan Canola: -0.2¢/bu / -$0.10/MT  (-0.02%) to $9.084/bu / $400.55/MT USD or $11.97/bu / $527.90/MT CAD

Yesterday’s Winnipeg ICE Close

Mar Barley: unchanged at $2.309 USD or $3.092 CAD
Mar Milling Wheat: -2.7¢ (-0.4%) to $4.874 USD or $6.423 CAD

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Moving Anything?

Grains this morning are mostly quiet as the market prepares for today’s U.S.D.A. report and adjust positions ahead of it. Canola pulled back yesterday with soybeans on oil moving lower and profit-taking, despite China’s soybean imports in November coming at 7.84M tonnes, 51% more than October’s shipments into the People’s Republic and 6% higher than November 2015’s imports. Echoing Commerzbank’s sentiments from earlier in the week, the United Nations doesn’t expect wheat prices to pick up in steam in 2017 as production outlooks are looking pretty good. Finally, today we get the last W.A.S.D.E of the 2016 calendar year from the U.S.D.A. and the focus is mainly on the demand side of the equation. Most expectations for changes from last month aren’t too significant, making Darin Newsom of DTN suggest that, like the rest of us right now in this winter shock, the U.S.D.A. is just too cold to move anything.

Going into the report later today (12 noon EDT to be exact), there isn’t much expected to be changed from November’s numbers, especially on the supply side as, historically speaking, most adjustments to acreage or production (at least for the US) is done in the January report. Pre-report guesstimates are that U.S. corn ending stocks for the 2016/17 marketing year will come in at 2.413B bushels (2.403B bushels in November’s report), 470M bushels of soybeans (480M last month), and 1.139B bushels of wheat (1.43B last month). Any focus on production numbers will be for the Southern Hemisphere, namely Australian wheat and Brazil and Argentinian corn and soybean output. Given good growing conditions in Brazil, we expect their numbers to likely increase a bit from last month, whereas Argentina’s are likely to pull back a bit because of weather issues, making the differences mute.

While we talked yesterday about India’s wheat import prospects, it turns out that they may be in a bind in the short term as about 400,000 MT of Ukrainian wheat supposed to arrive this month likely won’t make it by the end of December. Ports in Ukraine are giving preference to corn exports now as wheat shipping season is basically over. When the Ukraine wheat all arrives at the same time as purchases coming in from Australia, Indian ports won’t be able to handle all the ships at once. On the other side of the world, Brazil is likely not going to need to import as much wheat this year thanks to a bumper crop of nearly 6.7M tonnes (+21% YoY) with a lot of the crop seeing good milling qualities (i.e. falling number and gluten strength). With Brazil’s wheat imports of 5.1M tonnes at the lowest in the last 20 years or so, this doesn’t bode well for other wheat exporters as now Argentina has more of its wheat to move elsewhere since its neighbour much of anything (at least compared to year’s past).

Have a great weekend & stay warm!

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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