Going into the WASDE report today, there is a bearish tone as the market is mostly in the red this morning.
“The most difficult thing is the decision to act, the rest is merely tenacity. The fears are paper tigers. You can do anything you decide to do. You can act to change and control your life; and the procedure, the process is its own reward.”
– Amelia Earhart (First female pilot to fly solo across the Atlantic)
Ready for Today’s WASDE Report?
Grain markets this morning are mostly in the red as the market heads into today’s March WASDE report with a bit of a continued bearish tone. Soybean prices have dropped about 15 USD cents/bushel in Chicago in the past two days, while canola prices are down about $6 CAD/metric tonne in Winnipeg.
Yesterday was a pretty heavy-handed day of content for our GrainCents readers. There’s a lot of links below but here are a few of other pieces that we put out yesterday:
• Can a 4% growth rate in oatmeal demand help oats prices?;
• Feed barley prices are higher than malt barley prices in Australia;
• The effect that US trade policy on Brazilian corn exports;
• The impact of weaker Asian palm oil demand on soybean prices; and,
• The impact of weaker Asian palm oil demand on canola prices.
Start your free GrainCents 3-week trial today and head into the March WASDE report with a better sense of the different scenarios that could play out.
What to Do Before the WASDE Report
Today’s WASDE report from the USDA has some possibility of impacting where grain prices could go, especially canola prices and soybean prices. We felt it was important to give some further perspective ahead of the release of the March WASDE report.
Since we continue to think from the perspective how to do better grain marketing, check out what we’re specifically watching for in this March WASDE report as it relates to canola, soybeans, corn, and winter wheat.
Moreover, we know that are certain possibilities for canola prices that we’re targeting. This is in addition to being cognizant of the risks for soybean prices come noon eastern today when the WASDE report is released.
As we talked about all the market’s expectations for today’s WASDE in yesterday’s Breakfast Brief, there is certainly some bearish buzz that USDA may not cut Argentina’s soybean and corn production numbers as much as everyone is expecting. That same bearish buzz is continuing into this morning’s trading activity.
This in mind, Garrett looked at who the winners & losers are for a smaller Argentine soybean crop. Some of the private estimates for the Brazilian soybean crop are above 117 million tonnes. This in mind, Garrett dug into whether or not the USDA could match this number for Brazilian soybeans in today’s WASDE report.
Rains are in the forecast for the southern regions of Brazil, where the soybean crop tends to get planted later. This would support the development of those crops, albeit it could continue to delay safrinha/second crop corn seeding. The more serious implication though for the Brazilian corn crop is some serious rain in the long-term forecast, from which not a lot of corn seeds may be able to emerge from. 
What’s Going in International Wheat Prices?
While everyone is talking about the drought for corn and soybean production in Argentina, wheat farmers there are thinking about the possibilities of what could happen to 2018 wheat crop that will need to be planted in a few months.
We’ve previously spoken about the decent wheat crop that the Argentinians took off this past year. With no export taxes from the Argentine government, it looks like wheat acres will increase yet again when planting starts in May. While most of the wheat crop coming of in Argentina tends to be of lower quality, there are some implications for the higher protein market that spring wheat would play in.
Argentina has pushed itself into more competition for tenders in places like Algeria and Egypt. That being said, Egypt just bought another 120,000 tonnes of Russian wheat this week, but the price paid for the wheat was the highest it’s been in the past three years.
This has something to do with both the Russian Ruble appreciating but also US winter wheat prices climbing in February. We know that the US winter wheat crop is in tough shape. We took this a bit of a deeper and more historical look at where the US winter wheat crop ends up when quality is this bad.
As it relates to March WASDE report, not many changes are expected to be had. However, the main balance sheets to watch will be of those for Canada, Australia, and Russia.