June 7 – Grain Markets Swinging Back to Green

Good Morning!

Grain markets this morning are mostly in the green as the complex is looking back to weather premium with lack of trade talk news.

“You don’t have to swing hard to hit a home run. If you got the timing, it’ll go.” Yogi Berra (American Baseball Player)

graincents-trial

Grain Markets Swinging Back to Green

Grain markets this morning are mostly in the green as the complex is looking back to weather premium with lack of trade talk news.

As Garrett discussed in yesterday’s Grain Markets Today column, wheat prices led the complex on hot weather in the Black Sea and US Plains.

In general, weather across Europe is trending a bit bullish for wheat, but also grain markets in general. With this in mind, what’s it going to take to get soybean prices back to $10.50, or even, $11 at the Chicago Board of Trade?

For our GrainCents readers, we pushed out a lot of content yesterday. Everything from what the expectations are for the Indian 2018/19 crop of lentils and chickpeas, to estimates on peas demand there.

Staying in Asia, we know that there’s a lot of discussions about the trade happening with China. This includes a WTO (World Trade Organization) challenge that the US instigated against China, and 17 countries are participating as third parties in the proceedings. Australia might be pulling out because of their barley.

We also dug into how Russia’s wheat exports are going to climb above 42 million tonnes for the 2017/18 crop year! This is especially interesting, considering some of the consolidation taking place at Russian ports. [1]

One thing that we wrote about that is going to affect grain markets, especially the major US crops – corn, soybeans, and wheat – next week is not the WASDE, but the US Federal Reserve’s interest rate decision. For our Canadian readers, there are implications on how the Canadian Loonie will react. Sign in to your GrainCents account to get the inside look at what we’re thinking going into the Fed’s meeting.

Grain Markets Need to Watch Brazil

While the truck strike was ended last week by government intervention, there’s strong likelihood that the spat isn’t over yet. Grain markets need to be watching this, as last week’s strike stopped the nation’s gas and food supply chains cold turkey.

Further, grain buyers didn’t do any grain buying. But the question is, how much grain is left to sell in Brazil? Recent reports from IMEA is that Brazilian farmers have sold 13% more soybeans this year than last year’s sales at this time of year. Last year’s sale at this time of year was a record! This has happened as the Brazilian Real has moved to historically low levels, Brazilian farmers have sold more and more grain as their domestic prices have improved.

This comes as the second-crop safrinha corn harvest is just starting up. Expectations are that the USDA will have to lower their 2017/18 Brazilian corn production number below 85 million tonnes to account for the dryness seen the last few months there.

Ultimately, there isn’t a lot of positive things happening in the Brazilian economy. And the government is making promises that they literally cannot afford. This week we expect to see announcements from the Brazilian government for more subsidized money for farmers to take credit.

But the question is who is going to loan the Brazilian government the money?

No one wants to since the Brazilian economy is shrinking very quick, down to the same size of GDP more than five years ago.

To growth,

Brennan Turner

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

 

At 7:00 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2956 
CAD, $1 CAD = $0.7718 USD)

Jul Corn: 2.3¢ (0.61%) to $3.805 USD or $4.930 CAD
Jul Soybeans: -0.3¢ (-0.03%) to $9.94 USD or $12.879 CAD
Jul Soybean Meal (per short ton): -$0.40 (-0.01%) to $364.60 USD or $472.39 CAD
Jul Soybean Oil (cents per lbs): 0.04¢ (0.01%) at 30.69¢ USD or 39.73¢ CAD  
Jul Oats: 2.3¢ (0.96%) to $2.430 USD or $3.148 CAD
Jul Wheat (Chicago): 12.0¢ (2.31%) to $5.318 USD or $6.890 CAD
Jul Wheat (Kansas City): 10.8¢ (1.99%) to $5.505 USD or $7.132 CAD
Jul Wheat (Minneapolis): 9.0¢ (1.50%) to $6.078 USD or $7.868 CAD
Jul Canola: $1.10 (0.21%) to $11.902/bu / $524.80/MT CAD or $9.186/bu / $405.05/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. 10 - Grain Markets Reverse Ahead of WASDE
December 10, 2018 Brennan Turner
Grain markets this morning are mostly lower ahead of tomorrow’s December WASDE report, with wheat prices the most notable, pulling back from its significant gains on Friday.
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.