Oct 4 – Grain Markets Pricing in Harvest Pain

Good Morning!

Grain markets are all in the green this morning, as the complex tries to rebound from yesterday’s farmer selling and profit-taking.

“To be a champion, I think you have to see the big picture. It’s not about winning and losing; it’s about every day hard work and about thriving on a challenge. It’s about embracing the pain that you’ll experience at the end of a race and not being afraid.” – Summer Sanders (U.S. Olympic Champion Swimmer)

 

Test your grain today!

 

Grain Markets Pricing in Harvest Pain

Grain markets are all in the green this morning, as the complex tries to rebound from yesterday’s slow/quiet day of farmer selling and profit-taking.

As Garrett mentioned in the Grain Markets Today column, all but canola prices ended up in the red in yesterday’s trading session. However, this morning, most of the gains are being made back, with canola prices on the November contract notably just a hair shy of getting back that psychologically-significant level of $500 CAD/metric tonne.

Pushing wheat prices lower yesterday was the news that Russia’s agriculture safety watchdog would not be closing any ports in the near-term but did give a warning to 30 grain-loading port locations to dial it in on meeting phytosanitary.

Without a clear slowdown in Russian wheat exports, the country will likely continue to hold the #1 wheat exporter title again in 2018/19.

Speaking of exports, there are some big expectations for U.S. grain export sales, out this morning at 8:30 AM EST. Corn sales are expected to come in somewhere between 1 MMT and 1.6 MMT, soybeans, between 900,000 MT and 1.5 MMT, and wheat sales of 250,000 to 550,000 MT.

If you see grain prices head lower or higher today, it’s likely because of the respective bearish or bullish dynamic behind those export sales.

Grain Markets: A Story of Trade?

The hot buzz in North America is certainly the new NAFTA deal. Later today on the FarmLead Insights page, we’ll be publishing a more robust look at NAFTA 2.0 – AKA the USMCA – and the four main takeaways for grain markets.

P.S. I’m still waiting for someone to make up a parody of the YMCA song by the Village People, but insert pictures of North American politicians, autoworkers, and farmers. And obviously, have lyrics that say USMCA (instead of YMCA).

With the USDMA now agreed upon, there is likely less interest that China will be interested in doing any substantial trade deals with Canada and Mexico (let alone, the U.S.). [1] As such, some economists are expecting the trade war between the U.S. and China to go well into 2019. [2]

On that note, Jack Ma, the founder of Alibaba says that the U.S.-Chinese trade war could last 20 years. [3]

Weather Supporting Grain Markets?

While the trade war has artificially depressed grain markets, some bullish weather is starting to support it.

Australia had its driest September ever this year, so the crop size continues to deteriorate. There are even suggestions that Canadian canola may make its way in the Australian east coast to meet some of the demand there. [4]

Harvest progress throughout the American Midwest is generally stalled this week as rains slow down any field activity.

The worse conditions though continue to be seen in Western Canada. If you’re interested in the Farmers Almanac at all, they suggest that, through mid-October, it could be sunny and mild. [5] However, snow is expected in the last two weeks of the month.

For feed grain markets, it’s unlikely that the weather is going to be bullish for prices. We know that there’s certainly going to be more sub-par quality coming off the field this year, especially as it relates to cereals. We can all remember 2016 when nearly 2.1 MMT of Canadian durum and ended up in the feed, dockage, and waste column.

I don’t think the number will be as high this year but, as I mentioned in my regular column for the Alberta Wheat Commission, there’s still 1.4 MMT of durum and 10.4 MMT of spring wheat left to harvested on the Canadian Prairies.

If you’re one those with crop still out in the field, I strongly advocate getting ahead of the game now and proactively order your grain tests so you’ll quickly know your levels of disease, moisture, protein, etc..

To growth,

Brennan Turner

President | CEO
FarmLead
TF: 1-855-332-7653
contact@FarmLead.com
@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 = $1.2869 
CAD, $1 CAD = $0.7771 USD)

Dec Corn: 1.8¢ (0.49%) to $3.665 USD or $4.716 CAD
Nov Soybeans: 3.8¢ (0.43%) to $8.795 USD or $11.318 CAD
Dec Soybean Meal (per short ton): $1.20 (0.39%) to $312.40 USD or $402.02 CAD

Dec Soybean Oil (cents per lbs): 0.20¢ (0.07%) at 29.86¢ USD or 38.43¢ CAD  
Dec Oats: 3.0¢ (1.09%) to $2.780 USD or $3.577 CAD
Dec Wheat (Chicago): 1.3¢ (0.25%) to $5.165 USD or $6.647 CAD
Dec Wheat (Kansas City): 1.8¢ (0.35%) to $5.205 USD or $6.698 CAD

Dec Wheat (Minneapolis): 3.0¢ (0.51%) to $5.900 USD or $7.593 CAD
Nov Canola: $0.80 (0.16%) to $11.338/bu / $499.90/MT CAD or $8.810/bu / $388.46/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.

Most Recent Posts
Dec. 14 – Soybean Prices Remember Supply, Competition, Trade War
December 14, 2018 Brennan Turner
Grain markets are lower as the complex follows yesterday’s selling, soybean prices failed to find support after the big splash by China.
October 4: Corn Prices Edge Higher With October WASDE in Focus
October 04, 2018 Garrett Baldwin
Corn prices ticked higher Thursday as traders and analysts began to speculate on next week’s release of the October WASDE report.