Grain markets this morning are all in the green as a few different areas of bullish activity are supporting higher prices.
“Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.” – Helen Keller (Author and Activist)
Grain Markets Following Lead of Wheat Prices
Grain markets this morning are all in the green as the combination of short-covering, weather concerns, and a general risk-off sentiment is helping a bullish trend.
With a few of these green days in a row, it gives me a cue to remind myself that there is still a lot of grain in the bin, not just North America, but around the world.
Down in Brazil, there are certainly some dry conditions in the major corn-growing areas, but there’s more than just weather that grain markets are dealing with. Tomorrow is the deadline for truck drivers to stop protesting and accept some reforms. As mentioned in Tuesday’s Breakfast Brief, soybean prices have improved in Brazil, but their ability to get to market is a bit stuffed. With diesel prices in the country up almost 20% this year, major highways are blocked, and basic products on store shelves are becoming rarer.
There isn’t much demand for U.S. soybeans this summer after Brazil just pulled in a record harvest. Technically, the trend is down in July soybeans. The trends are currently higher for all three kinds of wheat, but old-crop ending stocks are concerning.
Wheat Prices are Hard to Ignore
For the second straight day, wheat prices took the spotlight regarding best performance in the grain markets. As Garrett recapped in yesterday’s Grain Markets Today column, wheat prices have been gaining on dryness concerns. This includes the US and Canada, but also Russia and Australia, two other major players.
Intuitively, this brings back ideas of what wheat prices did this time a year ago. We specifically acknowledged this and the tops of potential upside for our winter wheat and spring wheat GrainCents readers in this past Sunday’s weekly digest email. We’ll be doing the same for durum GrainCents subscribers today regarding the top-end potential of durum prices, so watch the twitter feed for new posts getting pushed out.
On durum, Areta thinks that global production will increase yet again in 2018/19. Do you think that’s going to be the case?
China’s Influence on Grain Markets?
China has been in the headlines for a lot of reasons these days, and we’ve covered it all.
Canadian Ag Minister Lawrence MacAulay just got back from a week-long trip in the People’s Republic trying to get three new canola traits approved.  They’ve been waiting since 2012 to get the nod from Beijing.
Based on the public statements from Ottawa, the new traits could be worth $400M worth of additional Canadian canola exports to China. This would equate to somewhere around 700,000 tonnes of additional exports supposedly a year. I’m a bit skeptical that this is the case.
On a related note, we dug a bit into some of the economics behind DowDupont/Corteva’s new non-GMO canola variety that will supposedly have higher protein content. Specifically, we answered the question, what will the higher protein do for your farm’s bottom line?