“It’s real nice and exciting for me to break the records, but it’s more exciting for me to be on a winning team.”
– Dan Marino (NFL Hall of Famer)
Good Morning FarmLead User!
At 7:15 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3312 CAD, $1 CAD = $0.7512 USD)
May Corn: -0.8¢ (-0.2%) to $3.628 USD or $4.829 CAD
May Soybeans: +0.5¢ (+0.05%) to $10.00 USD or $13.312 CAD
May Soybean Meal (per short ton): -$0.70 (-0.2%) to $325.90 USD or $433.84 CAD
May Soybean Oil (cents per lbs): +0.17¢ (+0.5%) to 32.91¢ USD or 43.81¢ CAD
May Oats: -1.3¢ (-0.5%) to $2.495 USD or $3.321 CAD
May Wheat (Chicago): -1¢ (-0.25%) to $4.293 USD or $5.714 CAD
May Wheat (Kansas City): -2.5¢ (-0.55%) to $4.428 USD or $5.894 CAD
May Wheat (Minneapolis): -3.3¢ (-0.6) to $5.45 USD or $7.255 CAD
May Canola: -1.1¢/bu / -$0.50/MT (-0.1%) to $8.603/bu / $379.28/MT USD or $11.451/bu / $504.90/MT CAD
Yesterday’s Winnipeg ICE Close
May Barley: unchanged at $2.241 USD or $2.983 CAD
May Milling Wheat: unchanged at $4.804 USD or $6.396 CAD
Checking In On Those Records
Grains this morning are mostly loweras the market continues to flip-flop whether enough rains are going to fall in the Southern Plains, currency fluctuations, and outside factors like the Trump White House administration being investigated by the FBI for ties to Russia. You might ask, “Brennan, how the heck does that have anything to do with grain markets!?” The answer is that it really doesn’t, but negative speculation over potential downfalls can create more bearish sentiment in broader markets, including the U.S. Dollar, which is lower this morning, and can in turner, swing commodity values on the futures boards. While outside equity/stock markets haven’t recoiled from their record levels just yet, we’ll continue to check in from the outside with a cautious eye.
The latest winter wheat crop ratings out from the U.S.D.A. yesterday showed that conditions continue to decline, but the market seems to have already priced in the effect of forecasted rains, hence the lower start this morning in the wheat complex. The portion of the winter wheat crop rated in good-to-excellent (G/E) in Kansas and Oklahoma fell by 2 points each to 36% and 40% respectively, while Texas’ G/E share dropped by 1 point week-over-week to 34%. Heading south from Texas, the U.S.D.A. attaché in Mexico City doesn’t expect corn imports from the U.S. to decline in 2017/18, despite the multiple headlines suggesting so. While 2017/18 Mexican corn production is expected to be bigger than last year by 1.25M tonnes (or +5% YoY) to 25.25M tonnes, the attaché is forecasting total corn imports to be 13.4M tonnes, with all but 200,000 of those tonnes coming from America.
In Brazil, AgResource is suggesting that the soybean harvest could be 75% complete by the end of the week with exports continuing to be strong. While the soybean harvest and 2nd crop / safrinha crop growing conditions are generally benign, major meat companies in the country are dealing with a major scandal involving the bribery of officials for the sale of tainted meat, both domestically and abroad, prompting China and South Korea to temporarily suspend imports. Next door in Argentina, the corn harvest is under way with about an 8th of the crop likely cut before the weekend. One of the more pleasant surprises in South America comes from Paraguay where the soybean harvest is nearing its end and the Ag Ministry says that farmers will combine a record 10M-tonne crop (U.S.D.A. at 9.4M tonnes), setting them up to be the world’s 4th-largest exporter of the oilseed in 2016/17!
Pulse crop prices aren’t just falling in North America but also in India, where record production has led to domestic prices falling by more than 30% in the past 6 months. After President Modi called for farmers to plant more oilseeds and pulses, supported by my hiring guaranteed state prices, Indian producers answered the call, with pulse crop production this year likely to climb above 22M tonnes (+35% year-over-year) while oilseed output should top 34M tonnes (+33% YoY). Similarly, oilseed prices are also down a third, meaning the 2nd-most populated country in the world likely won’t need to import as many vegetable oils, compounding bearish price headwinds thanks to expected increased production of palm oil in Southeast Asia (not to mention a record global soybean harvest).
P.S. If you missed our big announcement yesterday, read up on it 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.