Grain prices are mostly in the green as the broader market is feeling less concerned about a US-China trade war happening.
“Let the market, not politicians, determine the flow of rice, oil, and other commodities. Lower, more stable prices will ensue.” – Steve Hanke (US Economist)
Grain Prices Climb on Lower Trade Risk
Grain prices this morning are mostly in the green with the rest of the broader equity markets as trade tensions between the US and China have died down a bit.
Yesterday, the US stock market had its third-best day ever on more chatter that the US and China have been negotiating a more robust trade agreement and that they’re just in a “spat”. That being said, a “trade war” is certainly not off the table yet.  You wouldn’t have known that though if you saw yesterday’s US stock market performance.
In Grain Markets Today, Garrett walked through how wheat prices could’ve cared less about how well the US stock market did. Rains in the US Southern Plains, snow in the US Northern Plains, and the idea that Europe will increase wheat exports in 2018/19 was behind the bearish push.
Soybean prices and corn prices headed lower as funds dumped their long positions. There were some stronger cattle datapoints released yesterday, notably that US beef exports hit a record in 2017. Garrett asked and answered the question if Big Beef can revive Big Corn?
Canola prices were able to climb yesterday on supportive technicals that are keeping speculators in the game. We’ll be sending a note out to our GrainCents canola subscribers later today about where we’re thinking canola prices are heading.
A Quick Weather Update
While we’ve been pretty heavily focused on the weather in Argentina and Brazil the past two months, North American weather is becoming more talked about. In the US, April’s weather is looking fairly volatile with a bit more rain and snow in the forecast. 
In the eastern Corn Belt, there is plenty of rain expected through mid-April, with the ideas of winter storms not out of the question. In the US Plains and western Corn Belt, below-average rainfall and some colder temperatures are in the forecast, which supports some bullish ideas for grain prices.
In Canada, Environment Canada is expecting a slow thaw over the next 3-4 weeks.  AccuWeather is saying that the Canadian Prairies could start to see some above-average temperatures in May, but normal rainfall should help drier areas in the southern half of the region. Worth noting is that flooding is less of a risk this year in many parts of Western Canada. In Eastern Canada, above average temperatures are expected to come about in May, but there are certainly some wetter conditions in the mix until then.
Coming back to South America though, the weather has done its damage. We’re now seeing some estimates for Argentina’s soybean crop of under 38 million tonnes, and corn production under 30 million tonnes (the USDA is currently forecasting 47 million tonnes of soybeans and 34 million of corn). This in mind, there are some light showers in Argentina’s main production regions, but the next ten days are expected to be pretty dry still.
Higher Grain Prices Ignored by International Players
We’ve seen feed barley prices slide a bit in Western Canada, but prices are still amongst the best they’ve been in the last few years (check out some of the barley bids here). Domestic demand and exports were finally raised by Agriculture Canada, which means a bit of a tighter balance sheet.
Some feedstuff market players are suggesting that supply is drying up, but I’m not so sure about that. Yes, global barley stocks are set to decline, but substitution effects are very real in the feedstuff market. This in mind, for our barley GrainCents readers, I dug into the current state of feed grain trade in Western Canada and what we see that’s traded on the FarmLead Marketplace for feed grain prices.
We recently noted another tender by Saudi Arabia for barley, despite the fact that it’s falling out of favor in the country (and not just because of higher grain prices). More specifically, the trend in Saudi Arabia seems to be more corn imports instead of barley.
Another interesting note on Saudi Arabia is some of the changing dynamics in their wheat market. We’ll be digging in more today for our GrainCents spring wheat and winter wheat readers (so watch the GrainCents twitter feed), but there are some shifts in both the political economy and societal makeup.
Finally, India’s pulse crop this year is likely to be a record of more than 24 million tonnes. With that sort of tonnage, it’s not surprising that we see India’s import taxes on pulses where they’re at. However, there’s been more buzz lately that the government there will now start subsidizing exports of pulses too!
Adrian did some excellent analysis; noting local prices in India and comparing historical production and exports to said prices for pulses. Check out his assessment of the possibility of increased exports of India’s pulses, specific to peas here, lentils here, and chickpeas here.
While grain prices are certainly acting volatile on recent weather and geopolitical forecasts, government intervention that the likes of the Indian government are enacting on pulses isn’t good for anyone.