Aug 14 – Grain Markets Try to Rebound from WASDE

Good Morning!

Grain markets this morning are mostly in the green with canola prices following soyoil as the only two players in the red. 

“If we give something positive to others, it will return to us. If we give negative, that negativity will be returned.” – Allu Arjun (Indian Actor)

Grain Markets Try to Rebound from WASDE 

Grain markets this morning are mostly in the green with canola prices following soyoil as the only two players in the red.  

I’m back in the saddle this week after an incredibly humbling yet invigorating week spent at the Aspen Institute as a member of the 2018 Class of the Henry Crown Fellowship. [enter final] 

Last week, we saw a lot of fireworks, highlighted by Friday’s bearish August WASDE report. Like he does for every WASDE, our Garrett Baldwin did a real-time analysis of the WASDE numbers. Yesterday we continued to see a sell-off, led by wheat prices, as grain markets were still digesting record corn yields and soybean ending stocks in the US.  

This week, there’s a lot of focus on the weather and some of the geopolitical headwinds in the air, notably NAFTA renegotiations here in North America.  

Next week, we’ll see the annual ProFarmer Crop Tour kick off across the CornBelt. From the east, the tour will go through Indiana, Illinois, and Iowa before finishing in Rochester, Minnesota, while the western leg will cruise through Nebraska and Iowa before also ending in Rochester.  

If you haven’t yet been getting our GrainCents weekly Digest emails, no time like the present to start. Sign up for your three-week trial here.

SaudiSay “No” to Canadian Grain Markets 

Canadian farmers are expected to produce 8.4 MMT of barley and 32.5 MMT of wheat this year, up 6% and 8% respectively, year-over-year. But there is one country that said this week it won’t “Buy Canadian.” 

A diplomatic dispute between Saudi Arabia and Canada hit new heights last week. The Saudi Grain Organization (SGO) told trading exporters that it will no longer purchase Canadian wheat and barley when it seeks the commodity in its global tenders. 

The decision came after Ottawa called for the freedom of Saudi activists who had been arrested for protesting the Kingdom’s track record on human rights. Saudi Arabia responded by freezing Canadian trade and investment and kicked the Canadian ambassador out of the country. 

While this certainly grabbed headlines, Saudi Arabia hasn’t been a significant buyer of barley or wheat from Canadian (or American, for that matter) in recent years. 

Saudi Arabia did not purchase any Canadian barley in 2017/18, and just 132,000 MT in 2016/17. Further, Saudi Arabia purchased just 66,000 MT of Canadian wheat (excluding durum) in 2017/18, and just 68,250 MT in 2016/17. 

While those numbers are not eye-popping, there had been a hope that ongoing dryness in Russia, Australia, and Europe would act as a boost

Barley Production in the EU

US Crop Progress Shows Healthy Crop? 

Grain markets are also taking into account the health of the US crop, which is pretty strong right now. Here’s a breakdown across all major producing states in yesterday’s USDA crop progress report:  

• Corn rated good-to-excellent: 70% (71% last week, 62% a year ago, and 69% 5-year average);
• Soybeans rated G/E: 66% (67%, 59%, 66%)
Spring Wheat rated G/E: 75% (74%, 33%, 61%)
Spring Wheat harvest complete: 35% (13%, 38%, 27%)
Barley rated G/E: 81% (79%, 49%, 63%)
Barley harvest complete: 41% (16%, 48%, 38%) 

Also worth noting is that 26% of the American corn crop is now dented, which is double the 5-year average!  

This in mind, there’s been a lot of talk about how much the weather has been accelerating crop development. But is this a good thing?  

Considering how fast things are turning out there, what do you think this will do for yield? Or quality? Have your say in our Twitter poll this week, found here 

To growth,  

Brennan Turner

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

At 7:20 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3159 
CAD, $1 CAD = $0.7646 USD)

Dec Corn: 2.0¢ (0.56%) to $3.453 USD or $4.689 CAD
Nov Soybeans: 3.8¢ (0.44%) to $8.610 USD or $11.261 CAD
Oct Soybean Meal (per short ton): $3.30 (0.70%) to $331.20 USD or $433.17 CAD

Oct Soybean Oil (cents per lbs): -0.12¢ (-0.42%) at 28.34¢ USD or 37.07¢ CAD  
Dec Oats: unchanged to $2.670 USD or $3.492 CAD
Dec Wheat (Chicago): 4.5¢ (0.81%) to $5.580 USD or $7.297 CAD
Dec Wheat (Kansas City): 6.0¢ (1.06%) to $5.700 USD or $7.455 CAD

Dev Wheat (Minneapolis): unchanged to $6.103 USD or $7.982 CAD
Nov Canola: -$1.10 (-0.22%) to $11.383/bu / $501.90/MT CAD or $8.703/bu / $383.73/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.

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