FarmLead Breakfast Brief
Wednesday, October 19th, 2016
“Don’t wait. The time will never be just right.” – Napoleon Hill (American author)
At 7:00 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3082 CAD, $1 CAD = $0.7644 USD)
Dec Corn: -2¢ (-0.55%) to $3.518 USD or $4.602 CAD
Jan Soybeans: +0.8¢ (+0.1%) to $9.82 USD or $12.847 CAD
Dec Soybean Meal (per short ton): -$0.70 (-0.25%) to $302.70 USD or $396 CAD
Dec Soybean Oil (cents per lbs): +17¢ (+0.5%) to 35.24¢ USD or 46.10¢ CAD
Dec Oats: +0.8¢ (+0.35%) to $2.045 USD or $2.675 CAD
Dec Wheat (Chicago): -2.8¢ (-0.65%) to $4.173 USD or $5.459 CAD
Dec Wheat (Kansas City): -0.8¢ (-0.2%) to $4.21 USD or $5.508 CAD
Dec Wheat (Minneapolis): -2.5¢ (-0.2%) to $5.253 USD or $6.871 CAD
Jan Canola: +0.9¢/bu / +$0.40/MT (+0.1%) to $8.746/bu / $385.64/MT USD or $11.44/bu / $504.50/MT CAD
Yesterday’s Winnipeg ICE Close
Dec Barley: unchanged at $2.205 USD or $2.885 CAD
Dec Milling Wheat: -2.7¢ (-0.45%) to $4.806 USD or $6.287 CAD
The Time Is Now
Grains this morning are mixed as the market can’t seem to get any more action out of the action that is short-covering and weather-related rumours. One headline that traders focusing on Brazil may look at is recent rains creating concerns over the quality and size of Brazil’s wheat crop for the second year in a row (they’re just starting to harvest). Conversely, the rains are being welcomed by Brazil farmers who have recently seeded or were looking for some more soil moisture for their corn and soybean fields. Coming back across the equator, vomitoxin levels continue to be a big concern for grain buyers, not only cereals, but only for corn as we’re seeing above-average levels in places like Ontario this year. More concretely, an annual survey of samples in the Canadian province showed that more than ¼ had vomi levels of 2ppm or greater, levels unsuitable for feeding to animals, especially hogs. Regardless of the grain you already have or are in the process of taking off this fall, the time is now to get that grain tested and know the quality of what you have to sell / market this year.
Chinese national grain buyer, Sinograin, is purchasing corn in China’s northern regions for $195 – $213 USD / MT, a solid hike from where Chicago futures prices are trading at right now at about $140 USD / MT. However, those Chinese domestic prices are down about 1/3 year-over-year and almost 20% in the past month as China has stepped away from minimum support pricing in order to alleviate it’s massive stockpile of grains (something we spoke about in yesterday’s Breakfast Brief). While corn in China gets taken off and sold, EU winter rapeseed crops are just starting to emerge, but some fields aren’t looking so great after a dry September. With seeded area in Europe up an estimated 3% from this past year to 16.55M acres, there’s optimism by producers that production will rebound from the 4-year low of 19.9M tonnes seen in 2016/17. However, the latest-seeded fields across the continent (including France, Germany, and Poland) are all stressed, but this only represent a small portion of total acres.
November canola nearly touched $500/MT on the Winnipeg futures exchange (deferred delivery is all above the psychologically-significant level) but the Canadian oilseed has some challenges it has to overcome to keep climbing. First, we’re starting to see basis levels for soybeans in the U.S., as farmers selling off the combine are creating harvest pressures for the markets. Second, the futures boards for both Australian canola and Paris rapeseed have already started to pull back, meaning it’ll be harder for Winnipeg values to keep pushing higher without support from other exchanges. And finally, some warmer weather is allowing for some canola to finally get combined in Western Canada. Overall, we have seen some excellent canola sales being made on FarmLead by farmers managing their risk, posting at levels that are negotiable and closing prices anywhere from $10.50 to above $11 CAD / bushel (very dependent on area, freight, and movement period. Post your block of grain today & find the best price!)
Staying in Canada, the Saskatchewan Premier, Brad Wall, unveiled his own national climate plan, directly challenging Prime Minister Justin Trudeau’s carbon tax. More and more farm organizations and agricultural businesses are voicing their displeasure with the tax, considering the billions of dollars being given to other countries by the Liberal federal government to help “battle climate change” in those nations. Ironically, a piece of the federal report on the issue got leaked and suggests that “Canadian firms may face pressure to reduce domestic production, or shift production/investment to a country that has not yet priced carbon at a comparable level.” I spoke with many of the major Canadian producer groups last summer and over the fall/winter trade-show season about how quickly the new Liberal government would likely come after the ag sector in one way or another regarding climate change and it’s clear that that time is now.
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.