Nov 30 – Soybean Prices Are Optimistic About Argentina

Good Morning!

Soybean prices are leading grain prices higher this morning as the complex looks optimistically towards this weekend’s events at the G20 Summit in Argentina.

“You must welcome change as the rule but not as your ruler.”

– Denis Waitley (American Motivational Speaker)

Post Your Specialty and Feed Grain Today

 

Soybean Prices Are Optimistic About Argentina

Soybean prices are leading grain prices higher this morning as the complex look optimistically towards this weekend’s events at the G20 Summit in Buenos Aires, Argentina. Also impacting grain prices today is the fact that it’s the end of the month, so market positioning might also push markets around.

The January contract for soybean prices is a dime away from $9 USD / bushel in Chicago while the March 2019 contract is sitting above this new psychologically-significant level. If we think even further out, soybean prices on the November 2019 contract are sitting near $9.35. Since there are still a lot of unknowns, grain prices are still trying to factor in what 2019 acreage might look like, and thus, a lot of question marks remain for the state of 2019 U.S. soybean acres.  [1]

G20’s Impact on Soybean Prices

While U.S. President Trump canceled his meeting with Russian President Vladimir Putin because Russia was still holding some Ukrainian ships prisoner, the meeting with Chinese President Xi is very much still on.

The theory that holds right is that the economies for both the U.S. and China are looking for something to give them a feel-good story going into the holidays and so some sort of positive announcement is likely being priced in.

Of course, what the details are behind this announcement are, are still unknown. However, rumors have been swirling that there will be some sort of announcement that will kick the can down the road. [2] Specifically, the buzz is that the U.S. will agree to not impose any new tariffs on Chinese goods and vice versa, in addition to the U.S. having a say in the Chinese long-term economic policy planning.

Finally, the new NAFTA, also known as the USMCA, is expected to be signed by the U.S., Mexico, and Canada today down in Buenos Aires. There are some question marks though that Mexico may stall the process as the outgoing Mexican President may back out in order to get the steel and aluminum tariffs removed. [3]

Updates on Grain Exports

Grain markets are seemingly more concerned about the trade war than they are about actual trade flows. Only U.S. corn markets are really thriving so far in the 2018/19 crop year with 13.6 MMT shipped out, up 81.5% year-over-year!

Rounding it out, here’s a breakdown of U.S. grain exports through yesterday’s USDA report:

  • Total Wheat: 9.6 MMT through Week 25, down 15% year-over-year;
  • Durum: 243,665 MT, up 21.5% year-over-year;
  • Hard red spring wheat: 2.92 MMT, down 1% year-over-year; and
  • Soybeans: 11.92 MMT, down 43% compared to the same time in 2017.

US Weekly Exports & Soybean Prices

For Canadian grain exports, most crops are seeing a bigger number than a year ago as a robust 2018/19 exports campaign continues.

  • Barley: 750,000 MT, up 26% year-over-year;
  • Canola: 3.36 MMT, down 1.4% year-over-year;
  • Durum: 1.01 MMT, down 22.5% year-over-year;
  • Flax: 85,400 MT, up 1% year-over-year;
  • Lentils: 142,300 MT, up 55% year-over-year;
  • Non-Durum Wheat: 6.02 MMT, up 18.4% year-over-year;
  • Oats: 598,500 MT, up 4.2% year-over-year;
  • Peas: 693,000 MT, down 22% year-over-year.

If there’s one takeaway here, it’s that Canadian cereal exports are performing very well, notably barley which has two weeks of back-to-back crop year highs of weekly exports.

Again, most eyes – especially those concerned about soybean prices  – will be on the G20 Summit in Argentina over the weekend. Regardless if anything is announced between the U.S. and China, expect some more volatility next week, especially on Sunday night when the markets open back up.

To growth,

Brennan Turner

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

 

At 7:20 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3232 
CAD, $1 CAD = $0.7514 USD)

Mar Corn: 1.8¢ (0.48%) to $3.738 USD or $4.946 CAD
Jan Soybeans: 4.3¢ (0.48%) to $8.915 USD or $11.796 CAD
Jan Soybean Meal (per short ton): -$1.00 (-0.32%) to $308.5 USD or $408.21 CAD
Jan Soybean Oil (cents per lbs): 0.19¢ (0.68%) at 28.10¢ USD or 37.182¢ CAD  
Mar Oats: -3.0¢ (-1.03%) to $2.878 USD or $3.808 CAD
Mar Wheat (Chicago): 2.0¢ (0.39%) to $5.098 USD or $6.746 CAD
Mar Wheat (Kansas City): 2.5¢ (0.51%) to $4.950 USD or $6.550 CAD
Mar Wheat (Minneapolis): 0.5¢ (0.09%) to $5.685 USD or $7.522 CAD
Jan Canola: $1.50 (0.31%) to $10.886/bu / $480.00/MT CAD or $8.180/bu / $360.672/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. 14 – Soybean Prices Remember Supply, Competition, Trade War
December 14, 2018 Brennan Turner
Grain markets are lower as the complex follows yesterday’s selling, soybean prices failed to find support after the big splash by China.
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.