Oct 31 – Global Crop Progress Spook Grain Prices

Good Morning!

Grain markets this morning are mostly in the red as the complex is factoring in crop progress picking up speed around the world, on both planting and harvest fronts.

“Being brave means to know something is scary, difficult, and dangerous, and doing it anyway, because the possibility of winning the fight is worth the chance of losing it.”

– Emilie Autumn (American Singer)

Test your grain today!

Global Crop Progress Spook Grain Prices

Grain markets this morning are mostly in the red as the complex is factoring in crop progress picking up speed around the world, on both planting and harvest fronts. Also impacting prices are the end of the month (today), baseline projections released by the USDA on Friday, and next week’s mid-term U.S. election and the November WASDE report.

Also from the head of the USDA, US Ag Secretary Sonny Perdue confirmed recently that additional trade war tariff relief is on the way. [1] For the USDA’s baseline projections, they will provide a 10-year outlook on grain supply and demand, but this is just the teaser; the full report will be released in February. With the 2019/20 Planting campaign already underway with winter wheat, thoughts of U.S. corn and soybean acres are starting to buzz. [2]

Weighing on wheat prices is the announcement from Egypt that they’ve got enough wheat to cover them until March 2019. This means that U.S. wheat might not make it back into an Egyptian wheat purchase like it did last Friday for a while yet. Wheat futures jumped on signs of improving export demand as the United States gained a share of a large Egyptian wheat tender, along with Russia and Ukraine.

While it was a bright spot, winter wheat prices remain under press as actual U.S. total wheat exports are tracking 21% lower year-over-year, and the crop progress of winter wheat seeding gets back on track. [3]

Week 19 U.S. All Wheat Exports - Weekly

Crop Progress Accelerates

The North American harvest has picked up speed, with the 72% of the U.S. soybean crop and 63% of corn fields harvested through this past Sunday. Week-over-week, this is a 19 point and 14 point jump. For the U.S. corn harvest, it’s in line with the 5-year average, but soybeans are tracking behind.

The Western Corn Belt is lagging for both crops though as wet weather a few weeks ago certainly slowed crop progress. Conversely, the Eastern Corn Belt might hit some snags as pockets of wetter weather is on the horizon through the weekend.

The U.S. winter wheat seeding is a bit behind the norm with 78% of the crop now in the ground. However, the portion of the U.S. winter wheat crop emerged isn’t too far behind the 5-year average with 63% out of the ground as of Sunday.

Crop Progress report shows 63% of the U.S. winter wheat crop emerged

Also worth noting is that 52% of the U.S. winter wheat crop for the 2019/20 crop year is rated good-to-excellent (G/E). Compare this to last year’s 58% G/E at this time of the fall and the 5-year average of 53%.

In Canada, crop progress reports are nearly complete with Harvest 2018 finally nearing a close. However, there’s some tough grain coming off, including canola that’s still got a lot of green seeds in it. [4] We have over 45 credit-verified FarmLead buyers looking for this type of product so take a picture of a few strips rolled out and got it posted on the FarmLead Marketplace today.

Elsewhere, the Ukrainian winter wheat seeding campaign has wrapped up with nearly 15 million acres planted, up more than 500,000 year-over-year.

In Australia, crop progress is switching over to harvested numbers as combined as just starting to fire up. It might be a quick harvest though as ABARES recently downgraded their estimates for the crop in the Land Down Undaa significantly. Specific to wheat, ABARES now is projecting a harvest of just 16.53 million metric tonnes (MMT). For canola and barley, they have been revised lower to 2.2 MMT and 6.9 MMT respectively.

Conversely, Brazil’s soybean crop continues to be planted as quickly as possible as farmers there try to pursue export opportunities as long as the riff between the U.S. and China continues.

Overall, crop progress around the world has found another gear and the market is pricing that in accordingly. Be it more grain coming off the field or a decent start to the next crop; grain prices are always reflective of both the actual and potential supply.

To growth,

Brennan Turner

President | 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 = $1.3129 
CAD, $1 CAD = $0.7617 USD)

Dec Corn: -0.5¢ (-0.14%) to $3.643 USD or $4.783 CAD
Jan Soybeans: 0.8¢ (0.09%) to $8.478 USD or $11.131 CAD
Dec Soybean Meal (per short ton): unchanged to $305.10 USD or $400.57 CAD

Dec Soybean Oil (cents per lbs): -0.5¢ (-0.35%) at 27.95¢ USD or 36.70¢ CAD  
Dec Oats: 0.2¢ (0.71%) to $2.818 USD or $3.700 CAD
Dec Wheat (Chicago): -5.0¢ (-1.00%) to $4.948 USD or $6.496 CAD
Dec Wheat (Kansas City): -4.8¢ (-0.97%) to $4.900 USD or $6.433 CAD

Dec Wheat (Minneapolis): -1.3¢ (-0.23%) to $5.703 USD or $7.487 CAD
Jan Canola: -$0.10 (-0.35%) to $11.079/bu / $488.50/MT CAD or $8.439/bu / $372.08/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.

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