Grain News – Weather May Be Catalyst to Move Market
We have all been hopeful that the start of a new month would bring in a different trend in the grain markets. So far that hasn’t happened with corn, soybeans and wheat all trading lower to start out the new month. Maybe at least the weather can moderate to more normal temperatures to get something moving in the right direction.
The weather may just be the catalyst for the market to move higher as a production concern is really what is needed to fundamentally change things. With the cold wet weather, it looks like we could be off to a slower start to spring. This on top of the fact that fall tillage and crop nutrient application was way behind normal could make things interesting. Barge traffic on the river systems will be impacted some with the melting snow this spring as well. According to NOAA, 2018/19 has been the wettest winter (Dec-Feb) on record. This will take some time to dry out in many areas.
Weekly export sales on corn were reported at 38.2 million bushels, in line with expectations, but down from last week’s 48.8 million. Soybean exports were poor at 11.4 million bushels vs. 22 million expected. Wheat export sales were reported at 22.8 million bushels a bit better than expected. December corn exports were down 30 million bushels from November at 172 million bushels. We have work to do to reach the USDA number for the marketing year.
Tomorrow is the monthly USDA world stocks and usage report. We will need to look to see if they make any additional changes to supply. The average trade estimate for US corn ending stocks is 1.736 billion bushels. It is becoming more and more important to pay attention to World ending stocks as it relates to supply and demand. World corn stocks are estimated to be 309 MMT. The average estimate for the U.S. soybean ending stocks is 902 million bushels and world soybean ending stocks at 106.33 MMT.
China plans to put Canadian canola imports through stricter custom inspections, as the relationship between the two countries continues to deteriorate due to political tension. China accounts for 40% of Canada’s canola exports. China will buy 200,000 MT of pork for government reserves in response to the African Swine Flu outbreak there.
U.S. President Donald Trump said on Wednesday that trade talks with China were moving along well and predicted either a good deal or no deal between the world’s two largest economies. I am not sure what that statement even means. The market is tired of hearing stories and is now just waiting for actual sales to happen before reacting.
When the market does trade higher you need to be ready to capture those opportunities. Give us a call and we can put together a plan with some target price offers in place to capture those prices when they hit. Think Spring!