Aug 3 – Grain Prices Have Busy Start to August

Good Morning!

Grain prices are mostly all in the green this morning as the market continues to price in weather and fresh trade risks.

“Believe you can, and you’re halfway there.” – Theodore Roosevelt (Former US President)

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Grain Prices Have Busy Start to August

Grain prices are mostly all in the green this morning as the market continues to price in weather and new trade risks.

The White House is planning to impose a higher 25% import tariff on $200 Billion worth of Chinese imports, up from the 10% initially planned. [1] China’s response was probably best summed up by Wang Yi, China’s top government diplomat, who said, “We hope that those directly involved in the United States’ trade policies can calm down, carefully listen to the voices of U.S. consumers…and hear the collective call of the international community.” [2]

We know the trade war is starting to show its effects on the balance sheet of farmers regarding the cash grain prices being the lowest they’ve been in a few years. Now, we’re starting to see the implications for those of the industry. Specifically, ADM’s operating profits more than tripled in the April-to-June quarter as they benefited from higher processing volumes in South America. [3] Conversely, Bunge was bullish on soybeans last quarter – the wrong bet – and ended up losing about $125 million on the trade! [4]

The protectionist policies that are showing up in the trade war though are now starting to echo around the world as yesterday, Ukraine misspoke about the limitations of wheat exports. [5] This brought back memories of 2010/11 when they did just that, and it helped push wheat prices higher.

That’s exactly what happened yesterday, albeit wheat prices did close about 15-20 cents USD/bushel lower than the highs made on the day. However, wheat prices are again in the green this morning and supporting other grain prices higher.

Next Steps for Grain Prices

I’ve been on the road for the last two weeks, and there’s been a lot of action happening in grain prices over this timeframe.

One thing is that we’ve been extremely cognizant of activity in the non-durum wheat markets. We put out a special report for our GrainCents spring wheat readers last week, and then another notable piece yesterday for our winter wheat readers (for our Canadian readers, we include the likes of CPS, SWS, GP, and other low protein wheat in this category).

Earlier this week, we put out a report on the state of grain markets for July and what was the performance of corn pricessoybean pricescanola pricesflax priceswinter wheat pricesspring wheat pricesdurum pricesbarley pricesoats pricespea priceslentil prices,  and chickpea prices.

We also walked through the number of factors we’re watching in GrainCents for these 12 crops that we cover.

Next week, I’m on the road again, this time heading to the Aspen Institute as part of the Henry Crown Fellowship, which I was humbly named to in March.

This in mind, I won’t be writing any FarmLead Breakfast Briefs next week, but, alongside the rest of the GrainCents editorial team, I will continue to monitor grain markets for our subscribers. If you haven’t yet joined the nearly 1,500 other readers of GrainCents, start your free 3-week trial here and see what how making grain prices and markets easier to understand.

As we head into Harvest 2018, from the team here at FarmLead, we’d like to wish you a safe and productive harvest!

To growth,

Brennan Turner

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

 

At 7:15 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3020 
CAD, $1 CAD = $0.7681 USD)

Sept Corn: 2.3¢ (0.63%) to $3.690 USD or $4.804 CAD
Aug Soybeans: -1.0¢ (-0.11%) to $8.882 USD or $11.564 CAD
Aug Soybean Meal (per short ton): $0.20 (0.28%) to $333.00 USD or $433.57 CAD
Aug Soybean Oil (cents per lbs): 0.80¢ (0.28%) at 28.20¢ USD or 36.72¢ CAD  
Sept Oats: 0.02¢ (0.82%) to $2.450 USD or $3.190 CAD
Sept Wheat (Chicago): 3.8¢ (0.68%) to $5.643 USD or $7.347 CAD
Sept Wheat (Kansas City): 5.5¢ (0.97%) to $5.748 USD or $7.484 CAD
Sept Wheat (Minneapolis): 4.8¢ (0.79%) to $6.153 USD or $8.011 CAD
Nov Canola: -$0.90 (-0.18%) to $11.229/bu / $495.10/MT CAD or $8.24/bu / $380.26/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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