November 14 – Grain Markets Gaining An Edge?

Good Morning!

Today the Breakfast Brief looks whether or not grain markets are starting to gain an edge. Namely with the near-completion of US corn harvest and winter wheat seeding campaigns, what’s next? We also look at import needs of the Middle East and Africa, and with the introduction of FarmLead’s new tool, Price Discovery, how you’ll have an edge in your grain marketing.

“Gritty people train at the edge of their comfort zone. They zero in on one narrow aspect of their performance and set a stretch goal to improve it.”
–  Angela Duckworth (American psychologist)

What’s better than selling your crop at a profit?
Selling it for a bigger profit.
Post on FarmLead and get access to 500+ competitive buyers.

 

Grain markets this morning are mostly in the red.

Oilseeds are trying to climb up from a down day yesterday.

Garrett mentioned in Grain Markets Today that the U.S. corn harvest is 83% complete. While that’s a nice 13-point improvement week-over-week, it’s still 8 points behind the 5-year average.

After last week’s bearish November WASDE report, there’s more discussion about what the final U.S. corn fields will pull in.

More acutely, the corn that was planted early turned out pretty good.

The corn that was planted later didn’t get very good weather, and it’s suspected that yields will be worse. [1] Further, those later fields are likely to lose some bushels due to moisture loss.

For wheat, the fall-seeding campaign is practically complete. However, good-to-excellent ratings dropped one point from last week to 54% G/E. [2] What’s notable is that where it was dry this year, quality isn’t that great. For example, Montana and South Dakota, winter wheat crops rated G/E are only 39% and 14%, respectively.

January soybeans broke below the technically-important level of $9.80/bushel on the Chicago Board of Trade, meaning the uptrend is broken (I spoke about this in yesterday’s Breakfast Brief).

Brazilian farmers continue to hope for better soybean prices via a weakening of their currency. Historically, this is the best way for domestic soybean prices to increase in Brazil.

As a refresher, if a non-American country’s currency weakens, it becomes cheaper, in US Dollar terms, to purchase a product from that country.

With 12 weeks left in their marketing year, Ag Resource expects Brazil to surpass the 65-million tonnes of soybean exports that the USDA estimated last week. [3] On the corn front, last week Brazil exported 1.1 million tonnes, and another 3.4 million tonnes is expected to be shipped in the next few weeks.

That will certainly compete with the ramp-up of US corn exports.

Ethiopia Needs Wheat, Saudi Arabia Doesn’t Need Feed Barley

Saudi Arabia’s feed barley imports in 2017/18 are likely to fall short of the 9 million tonne-target that the USDA has set out for them. The USDA’s attaché in Riyadh says that the number is likely closer to 7.6 million tonnes. [4]

Further, they dropped 2016/17’s barley imports by the Middle Eastern country from 10.5 million tonnes to 7.6 million!  The reason for the decline is that Saudi Arabia shipped in a record 11.1 million tonnes in 2015/16 and there was a lot carried over into 2016/17.

In both 2015/16 and 2016/17, the top exporter of barley to Saudi Arabia was Ukraine, who shipped in 2.33 million and 2.28 million tonnes each year, respectively.

grain-markets-saudi-arabia-feed-barley-imports
Saudi Arabia’s feed barley imports are likely to fall again in 2017/18

 

Ethiopia is looking for another 400,000 tonnes of wheat, and it’s likely it’ll come from the Black Sea. [5]

Why?

It’s the cheapest! While final bids won’t be selected for another two weeks, it’s estimated the delivered price will be around $290 USD/metric tonne (or $7.80 USD and $10 CAD per bushel).

Over the weekend, I dug into why we’re seeing lower prices globally, namely in Canada and whether the loss of the Canadian Wheat Board is the reason or not.

Introducing Price Discovery at FarmLead

We end today’s Breakfast Brief with the announcement of a remarkable new feature at FarmLead: Price Discovery.

Price Discovery is meant to give you a better perspective of what’s going on with prices for your crops, not just today and in the future, but in the past.

Too often in grain sales, we have short memories.

For example, can you tell me what the average local price for your corn or canola was a month ago?

Three months ago?

The purpose of the question and Price Discovery is to for some relativity in our decision-making when it comes to making grain sales. If you know that the local price of your crop has gone up 15% from where it was just a few months ago, that could be a natural signal to sell something (again, not all your grain, just a 10% block).

For the Price Discovery tool, we pull in over 29,000 data points daily and input it into the Price Discovery tool. This includes data from individual elevators but also incorporating some of the statistically-relevant data on the FarmLead Marketplace.

Today, Price Discovery will show you the low, high, and average price for that specific crop in your area. It will also give you a chart to tell you what the price has been over the past month.

Today, FarmLead’s Price Discovery tool covers the main crops listed on the futures board, but over the coming weeks and months, we’ll provide options for other grain, oilseeds, and pulses.

Also In the coming weeks, we’ll provide a benchmark to tell you how high (or low) you are above the rest of the market when you are listing your grain for sale on the FarmLead Marketplace.

Finally, the Price Discovery tool allows you to toggle between a delivered price or FOB, picked up at your farm. This way you can get a true sense of what the net-back-to-your-farm gate price is (after freight is accounted for).

Price Discovery is available on the FarmLead.com website and will be pushed out to the FarmLead mobile app within the next few weeks.

To ensure that you’re getting the best use of the FarmLead Price Discovery tool, please make sure your Reference City in your FarmLead Account Settings is up to date.

Also, you can watch a brief tutorial video embedded in Garrett’s post yesterday on How to Know You’re Getting The Best Price For Your Grain.

Ultimately, Price Discovery, is another tool from our awesome team that cements our mission of making the farmer better at selling their grain.

To growth,

Brennan Turner
President/CEO | FarmLead
1-855-332-7653 (Toll-Free)
www.FarmLead.com
@FarmLead (on Twitter)

At 7:35 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2703 CAD, $1 CAD = $0.7872 USD)

Mar Corn: -0.8¢ (-0.2%) to $3.543 USD or $4.501 CAD
Jan Soybeans: +2.8¢ (+0.3%) to $9.77 USD or $12.414 CAD
Jan Soybean Meal (per short ton): +1.10 (+0.35%) to $314.50 USD or $399.62 CAD
Jan Soybean Oil (cents per lbs): -0.01¢ (-0.05%) to 34.47¢ USD or 43.80¢ CAD  
Mar Oats: +1¢ (+0.35%) to $2.84 USD or $3.609 CAD
Mar Wheat (Chicago): -1.8¢ (-0.4%) at $4.415 USD or $5.61 CAD
Mar Wheat (Kansas City): -1.5¢ (-0.35%) at $4.428 USD or $5.626 CAD
Mar Wheat (Minneapolis): -1.3¢ (-0.2%) to $6.458 USD or $8.205 CAD
Jan Canola: -2.3¢/bu / -$1/MT (-0.2%) to $11.623/bu / $512.50/MT CAD or $9.148/bu / $403.34/MT USD or 

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. 10 - Grain Markets Reverse Ahead of WASDE
December 10, 2018 Brennan Turner
Grain markets this morning are mostly lower ahead of tomorrow’s December WASDE report, with wheat prices the most notable, pulling back from its significant gains on Friday.
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.