June 29 – Grain Markets Ready for USDA, StatsCan Reports

Good Morning!

Except for Kansas City wheat prices, grain markets this morning are in the green ahead of acreage reports out from the USDA and StatsCan.

“If you stay ready, you ain’t gotta get ready, and that is how I run my life.” – Will Smith (US Actor)”

find-better-grain-prices

Grain Markets Ready for USDA, StatsCan Reports

Except for Kansas City wheat prices, grain markets this morning are in the green ahead of acreage reports out from the USDA and StatsCan today. At 830AM EST, we’ll get an update to StatsCan’s acreage estimates from April. A few hours later, at 12 PM EST, we’ll get the USDA’s stocks and acreage report.

We’ll be live-blogging both reports for our GrainCents readers so watch our GrainCents Twitter feed for the specific crop-by-crop posts. You can also just login to your GrainCents dashboard to see the updated numbers and our interpretation of them.

While today’s reports are going to be the large focus of grain markets, the elephant in the room remains trade war talk. China and the US continue to spar and it seems like we’re headed down the road of tariffs getting implemented next Friday, on July 6.

On that note, this week, the USDA’s Ag Attaché in China says that the People’s Republic will only import 100.5 million tonnes of soybeans this year, not the official USDA estimate of 103 million tonnes. While it’s certainly expected that China will import fewer soybeans from the US, it’s widely expected that trade lanes will change in other ways. More specifically, US soybeans will start to head towards Europe instead. [1]

Speaking of the EU, the European Commission recently downgraded its wheat production estimate by 2.65 million tonnes to 137.6 million tonnes. Dry weather, namely in northern Europe, was the main blame. Similarly, SovEcon just downgraded its estimate for the Russian wheat crop again, this time by 600,000 tonnes to 72.5 million.

What to Expect from the USDA and StatsCan

Going into today’s reports from the USDA, the market is looking slightly higher corn and soybean acres, but lower wheat acres. Year-over-year though, corn and soybean acres are certainly expected to be less than last year, whereas wheat acres are up, namely because of spring wheat acres increasing significantly year-over-year.

For stocks, the trend continues to show higher numbers than in years past. See the chart below for reference.

June-2018-usda-stocks-acreage-estimates

Today’s trading activity is volatile for a few reasons. First, it’s the last trading day of both month AND the quarter. This means that speculators looking to shore up or close out positions ahead of the month’s end could be very active.

Allendale’s Rich Nelson notes that, on the day of the USDA’s June stocks and acreage report, in the last 15 years, there have been some while swings. [2] Specifically, corn prices closed lower in 10 out of the 15 years, on average, by 18 cents. For soybean prices, things are a little more evenly based, but the volatility is certainly still there. In the up years (8 out of 15 years), soybean prices climbed an average of 31 cents. In down years (7 out of 15 years), soybean prices ended about 24 cents lower.

Going into the StatsCan report at 830 AM EST, it’s widely expected that we’ll see more canola but fewer pulses.

June-2018-statscan-acreage-estimates

Taking These Numbers in Stride

While this is certainly a busy day for grain markets, we need to continue to remember to take these numbers in stride. They are one moment in a large, elaborate system that is the grain markets. Nonetheless, they’re important to reflect on for a few days and digest them before moving on.

That being said, FarmLead recently was named to our own report that we’re taking in stride. Specifically, for the second year in a row, FarmLead has been named to Forbes’ list of Top 25 Most Innovative AgTech Companies. Our team will dwell on these numbers for a few days during the holiday weekend. It’s a great feather in the cap and a continued indication of how we’re making cash grain trade easier, but also more effective.

Next week, I won’t be writing the Breakfast Brief but we will be publishing our recap of June 2018 grain markets on the FarmLead Insights page on Tuesday, July 2.

Have a great weekend!

To growth,

Brennan Turner

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

Due to travel, no futures grain markets pricing data is published today but you can find them here.

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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