FarmLead Breakfast Brief
Monday, January 30th, 2017
The biggest competition is myself. I am not looking to follow others or pull them down. I’m planning to test my own boundaries.” – Rain (South Korean entertainer)
At 7:00 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3149 CAD, $1 CAD = $0.7605 USD)
Mar Corn: -3.5¢ (-0.95%) to $3.59 USD or $4.721 CAD
Mar Soybeans: -11.8¢ (-1.1%) to $10.375 USD or $13.642 CAD
Mar Soybean Meal (per short ton): -$5.60 (-1.65%) to $337.40 USD or $443.66 CAD
Mar Soybean Oil (cents per lbs): -0.28¢ (-0.8%) to 33.99¢ USD or 44.69¢ CAD
Mar Oats: -1.8¢ (-0.7%) to $2.515 USD or $3.307 CAD
Mar Wheat (Chicago): -4¢ (-0.95%) to $4.165 USD or $5.477 CAD
Mar Wheat (Kansas City): -3.8¢ (-0.85%) to $4.305 USD or $5.661 CAD
Mar Wheat (Minneapolis): -2.8¢ (-0.5%) to $5.573 USD or $7.327 CAD
Mar Canola: -5.2¢/bu / -$2.30/MT (-0.45%) to $8.884/bu / $391.73/MT USD or $11.682/bu / $515.10/MT CAD
Friday’s Winnipeg ICE Close
Mar Barley: unchanged at $2.327 USD or $3.092 CAD
Mar Milling Wheat: -8.2¢ (-1.25%) to $4.843 USD or $6.368 CAD
Grains this morning are all lower as the grain trade continues to focus on what’s going on with President Trump policies, with this weekend’s protests being on a new immigration policy as it relates to people coming in from specific countries. On the docket this week, the new administration will outline more U.S. economic and infrastructure policies but with plans sporadic and unclear, the outside markets today are mostly going into a risk-off mode, opting for more safe-have investments like gold instead of equities or oil. Last week, managed money turned net long on corn, despite, as Allendale Brokers points out, basis across the Midwest dropped by about a nickel, indicating buyers are holding onto enough supplies as they look down the road to their needs.
While many eyes are on Washington, D.C., I pointed out in my weekly grains market wrap-up on RealAgriculture.com that it’s not all about the politics! A lot of focus continues to lean on South American weather and export demand. For the former, rains in Brazil slowed soybean harvest progress for a second straight week but at more than 16% of the crop combined already in largest-producing-state Mato Grosso, things are technically still ahead of schedule since they got started much earlier than usual this year. In Argentina, World Weather Inc. (Drew Lerner) says that conditions aren’t ideal but it’s enough to get crops to start growing. Accordingly, there are some bearish pressures on the oilseeds markets and so those chasing the highs may be better served to lock in something today, especially while soybeans are above $10 USD / bushel and canola is above $500 CAD / MT on their respective futures boards.
That being said, we’ve been mentioning for the past couple of weeks, we think there’s some great opportunities on new crop to take advantage of and we’re not alone (post your new crop offer on FarmLead today!). Naomi Blohm of Stewart-Peterson reminds us that these are profitable levels and if you’re one of those frustrated by selling 10 or 20% of that potential new crop production too early last year, “you can reown that cash sale with an option strategy” in order to take advantage if the market goes higher. This is especially true in the oilseeds market, which tend to trend higher from now until June as South American harvest risk and North American planting risk are considered. With questions around U.S. trade policy remaining unanswered, the threat of less U.S. grain exports is pretty real right now and with acreage going up, there could be a fair amount of soybeans sitting in America with nowhere to go until the price starts to look down toward those $8 USD / bushel handles.
IF you’re in Edmonton this week for the Farm Tech Conference, stop by the booth in Hall H to chat with myself or Landon Zimmer about the new mobile app, what we see happening with markets, and how we’re proactively managing risk.
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.