May 24 – Grain Markets Following Lead of Wheat Prices

Good Morning!

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)

graincents-trial

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?

World Durum Production

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. [1] 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?

To growth,

Brennan Turner

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

At 7:10 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2892 
CAD, $1 CAD = $0.7757 USD)

Jul Corn: 2.8¢ (0.67%) to $4.113 USD or $5.302 CAD
Jul Soybeans: 7.3¢ (0.70%) to $10.165 USD or $13.491 CAD
Jul Soybean Meal (per short ton): $3.80 (1.00%) to $384.50 USD or $495.69 CAD
Jul Soybean Oil (cents per lbs): 0.02¢ (0.06%) at 31.88¢ USD or 41.99¢ CAD  
Jul Oats: $0.02 (0.79%) to $2.54 USD or $3.275 CAD
Jul Wheat (Chicago): 7.8¢ (1.46%) to $5.388 USD or $6.946 CAD
Jul Wheat (Kansas City): 6.5¢ (1.18%) to $5.583 USD or $7.197 CAD
Jul Wheat (Minneapolis): 5.0¢ (0.78%) to $6.470 USD or $8.341 CAD
Jul Canola: $2.40 (0.45%) to $12.19/bu / $537.60/MT CAD or $9.46/bu / $417.01/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.

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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