Grain News – World Supply and Demand News
It is no surprise the market continues to look at headlines for direction. Last night CFO of China’s most important technology company was arrested in Canada and is being extradited to the US. The arrest appears to be related to alleged violations of US sanctions against Iran. This headline interests me as it relates to the grain market. So far grain wires have not spoken much of technology and intellectual capital and how it relates to the negotiations, but these issues are all included in bargaining mix which sure adds complexity to our soybean exports. Grain wires report of new cases of African swine fever in China and wonder if China will buy 5 mmt of beans for their state reserves.
In world supply and demand news, private exporters reported sales of 198,120 metric tons of corn to Mexico while Algeria looks to Argentina for their corn needs. Ukrainian corn harvest is expecting a record-breaking harvest this year at 70.2 mmt with an average corn yield of 122.5 bpa. Weather maps for South America remains generally favorable.
WASDE report will be released on Tuesday, December 11th and normally this time of year the trade is in a debate over the January grain stocks report, but it seems like spring planting intentions are already taking up that space. Maybe stocks are a forgone conclusion or maybe acres are just that interesting of a story? I would choose the latter. SRW had a hard time getting seeded this fall and we are already seeing spreads and interest reflect lower wheat acres but how much and how many of these acres will get added into the corn and bean discussion? If the SRW acres discussion isn’t interesting enough the corn/bean ratio suggest we will see a sizable shift to corn while South America ramps up bean production but there is the overarching question of what kind of say will farmer financing have in the acres discussion (beans are much cheaper to put in the ground). To bring it full circle somehow the discussion over US/China intellectual property is in some why effecting spring planting intentions. At this point it seems prudent to read less headlines and spend the time looking at your costs and if there is an opportunity to sell 2019 corn and beans put an offer in and enjoy the holidays.