Where are the bullish factors for grain markets?
“A positive attitude causes a chain reaction of positive thoughts, events, and outcomes. It is a catalyst and it sparks extraordinary results.”
– Wade Boggs (American baseball player)
At 7:20 AM CDT in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.2541 CAD, $1 CAD = $0.7974 USD)
Dec Corn: -1.3¢ (-0.35%) to $3.493 USD or $4.38 CAD
Jan Soybeans: -6.3¢ (-0.6%) to $9.953 USD or $12.481 CAD
Dec Soybean Meal (per short ton): -$2.30 (-0.7%) to $322.20 USD or $404.06 CAD
Dec Soybean Oil (cents per lbs): -0.12¢ (-0.35%) to 33.47¢ USD or 41.97¢ CAD
Dec Oats: +3.3¢ (+1.25%) to $2.628 USD or $3.295 CAD
Dec Wheat (Chicago): -0.5¢ (-0.1%) to $4.36 USD or $5.468 CAD
Dec Wheat (Kansas City): -0.5¢ (-0.1%) to $4.333 USD or $5.433 CAD
Dec Wheat (Minneapolis): +2.3¢ (+0.35%) to $6.118 USD or $7.672 CAD
Jan Canola: +0.2¢/bu / +$0.10/MT (+0.02%) to $9.142/bu / $403.09/MT USD or $11.465/bu / $505.50/MT CAD
Yesterday’s Winnipeg ICE Close
Dec Barley: unchanged at $2.57 USD or $3.222 CAD
Dec Durum Wheat: unchanged at $6.10 USD or $7.821 CAD
Dec Milling Wheat: -2.7¢ (-0.45%) to $4.991 USD or $6.26 CAD
Searching for Bullish Catalysts in Grain Markets
Grain markets continue to pull back from Friday’s highs. Corn prices, soybean prices, and Chicago wheat prices are all in the red this morning.
Like Garrett noted in Grain Markets Today, traders have seemingly come down from their sugar high. Reality is sinking back in that record soybean production and near-record corn output in America are bearish factors.
The news isn’t all negative though: We’ve dug into several bullish catalysts in soybeans, and a few short-term blips may emerge.
This morning though, markets are searching for new production headlines out of South America.
South American weather models are suggesting that rains are expected in the central and northern regions. These areas have experienced below-average precipitation so far during the “wet season.”
American Corn Harvest Behind Schedule
What’s arguably bullish for corn is that, according to the USDA’s most recent crop progress report, the U.S. harvest is still way behind. 
Farmers have combined just 28% of the crop thus far. Last year, 44% of fields were harvested by now with the 5-year average being 47%.
Minnesota is the most behind in this year’s corn harvest.  Just 7% of the crop has been combined thus far, well behind the 5-year average of 38%.
In Kansas, corn yields are coming in lower as drought conditions have made it tough to produce average yields in the Wheat State’s soils.  In Iowa, yields continue to exceed expectations though. 
I mentioned in Friday’s analysis of the October WASDE report that the last time the U.S. corn harvest was this delayed was in 2014. That year, the USDA dropped their average corn yield estimate by 3.2 bushels in the January WASDE grain report from what they said it was in October.
On the bearish side, the USDA did raise its rating of the U.S. corn crop by 1 point to 65%.
Technically, this time last year, the figure sat at 74%.
Another Bullish Soybean Factor?
The U.S. soybean harvest is now 49% complete. This figure is a little behind the 5-year average of 60%.
Much like corn, the Minnesota soybean harvest is also super slow. 45% of the Gopher State’s bean fields have been combined when usually, it’s 82% complete by now.
The bullish factor you’re looking for though is the crush rate that NOPA announced yesterday. 
According to the U.S. National Oilseed Processors Association, total crush volume in September was 136.4 million bushels (or 3.712 million tonnes if you used GrainUnitConverter.com)
The market was expecting a little more than 138 million bushels. However, it’s worth noting that the September 2017 crush was the largest volume for that month in a decade.
Also coming out of the NOPA report was soy oil stocks. The market was expected 1.33 billion pounds, but as of Sept. 30, NOPA says that there’s only 1.30 billion.
What’s 20 million pounds between friends, right?
Well, from August 2017, this is an 8% drop in inventories. Further, year-over-year, September 2017’s soy oil stocks are 5.5% lower. This figure is positive for soy oil (and to a certain extent, canola) prices as it indicates that demand is displacing inventory faster than new supply is coming into the pipeline.
Tracking Grain Exports
US soybean shipments inspected last week came in at about 65 million bushels.
These 1.77 million tonnes would be about 19% higher than the previous week but still down by more than 11% from the same week in 2016.
For corn, U.S. shipments inspected last week were nearly half of what they were the week prior and about 1/3 lower than what they were a year ago this week.
Total U.S. corn exports for the marketing-year-to-date are now tracking behind last year’s pace. It’s still early in the export season but there’s clear competition from South America and the Black Sea.
Sidenote: Mexico continues to be the largest importer of American corn, despite the concerns of NAFTA renegotiations. The Ag Ministers from Mexico, Canada, and the U.S. are set to meet in Denver this week. 
For wheat, U.S. shipments last week were less than 12 million bushels, which the market viewed as negative yesterday. That’s because this is down nearly 1/3 from the previous week and about 8% lower than the same amount a year ago.
While U.S. wheat exports are waning a bit, I recently looked at the rise of Ukraine wheat exports, and how countries like Morocco are turning to the Black Sea for wheat supply.
Of note is that European and Canadian supply lost traction last year with Morocco.
Still, I did note last week, how Canadian wheat exports are tracking higher compared to a year ago.
Wheat prices in North America continue to trade sideways as there’s a lot of unknowns out there. The U.S. winter wheat seeding campaign is 60% complete. This number is technically behind the 5-year average of 71%, but rains have slowed down the progress.
Those rains are beneficial to parched soils in places like the Dakotas, Nebraska, and Kansas.
There are also unknowns about the crop potential in the Southern Hemisphere. If Australia and Argentina aren’t able to fill the demand from trading partners in Brazil, Indonesia, and other Asian countries, who is best poised to win the business?
Arguably, Black Sea options continue to be the cheapest, and as we mentioned a few weeks ago, Russia is looking to more wheat export business.
Needless to say, North American wheat prices continue to wait for a bullish catalyst.
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