Tag Archives: wheat

Grains settled nearly opposite of Tuesday with soybeans higher, corn and wheat lower. Arlan Suderman, Chief Economist for INTL FC Stone, shares his thoughts on why the wheat bulls may have been a little overdone on Tuesday.  Suderman also shares INTL FC Stones thoughts on Friday’s USDA Forum.

Currencies play a significant factor in grain export competitiveness around the world.  Suderman looks into how the US Dollar is extremely strong against the Brazilian Real impacting soybean exports. The higher dollar though is not as big of a factor for US protein exports. Though there are logistical issues within in China limiting frozen meat exports from the US.

Suderman also updates on the latest happenings from China and the corona virus. As China looks to get its economy back on it’s feet that could mean a big stimulus package. Suderman explains how Chinese stimulus may be beneficial to US exports.

Troy:  Higher corn & wheat, lower soybeans after a 3 day weekend.  Coronavirus fund positions & markets.  Australia is short on wheat.  Eric-Cattle & demand. Australia and export movement.  Cold storage has a full freezer would give the U.S. an export opportunity.

 

Demand vs. Supply.  Coronavirus continues. THIS WEEK’S WEATHER IN THE HARD RED WHEAT BELT REMAINING DROUGHT-STRICKEN FOR WESTERN & WEST-CENTRAL KANSAS, THE ACREAGE REPORT TODAY BEING UPDATED, & THE FRENCH WHEAT CROP CONDITIONS, WHEAT REMAINS OUR MAJOR PRICE-LEADER FOR FUNDAMENTALLY-RELATED/CURRENCY-RELATED SHORT-COVERING A bright spot is the cattle market.

 

USDA on Tuesday boosted exports for soybeans 50 million bushels (mb) but lowered corn exports 50 mb, despite high sales expectations because of recent trade deals.

USDA increased its forecast for soybean exports by 50 mb to 1.825 billion bushels (bb). Ending stocks, at 425 mb, declined from last month by a corresponding amount and fell within the range of pre-report expectations.

Corn exports were projected at 1.725 bb, down 50 mb from January.

USDA did bump up wheat exports up 25 mb from the January report, to 1 bb

USDA released its February World Agricultural Supply and Demand Estimates on Tuesday as well as its monthly Crop Production report. Traders were closely watching just how USDA might integrate projected exports to China for a few key commodities following the announcement last month of the phase-one trade deal with China that is meant, in part, to boost U.S. agricultural sales to China.

According to DTN Lead Analyst Todd Hultman, Tuesday’s U.S. ending stocks estimates were neutral for corn and slightly bullish for soybeans and wheat; world ending stocks estimates were neutral for corn and wheat, but somewhat bearish for soybeans.

You can access the full reports here:

— Crop Production: https://www.nass.usda.gov/…

— World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…

CORN

The monthly corn production estimate for the 2019-20 crop was projected at 13.69 bb, the same as January, with a national average yield of 168 bushels per acre, also unchanged.

Exports were lowered 50 mb to 1.725 bb with USDA citing “the slow pace of shipments through January.” USDA increased domestic ethanol use by 50 mb as well, increasing use to 5.425 bb for ethanol for the 2019-20 crop.

Total corn use was projected at 14.07 bb, the same as January, and ending stocks were projected at 1.892 bb, also the same as January. That brings the stocks-to-use ration for the 2019-20 crop at 13.4%.

The average farm-gate price for the 2019-20 crop was pegged at $3.85 a bushel, also unchanged for January.

Globally, USDA slightly lowered global production by a fractional number, but increased global domestic demand by 1.81 million metric tons (mmt). Global ending stocks, less China, were dropped by 970,000 metric tons.

The corn stocks-to-use ratio for the 2019-20 crop year was 13.4%, unchanged from last month.

SOYBEANS

USDA forecast 2019-20 domestic ending stocks at 425 mb, a 50 mb decline from last month based on forecasts for corresponding increase in exports. The agency left production and other demand forecasts unchanged.

The national average farm gate price was lowered by a quarter to $8.75 per bushel.

Globally, USDA revised ending stocks upwards to 98.86 mmt a 2.19 mmt increase. Brazilian production forecasts climbed by 2 mmt to 125 mmt while Argentine production was left unchanged at 53 mmt.

Domestic soybean stocks-to-use for 2019-20 declined to 10.5% from last month’s 11.8% estimate.

WHEAT

Domestic 2019-20 wheat ending stocks were trimmed by 25 mb to 940 mb, a five-year low that came within analysts’ pre-report expectations. That change was driven entirely by an increase of 25 mb in wheat exports, from 975 mb in January to 1 bb in the February report. The agency cited “growing competitiveness in international markets” for that adjustment.

The average farmgate price for wheat was pegged at $4.55 per bushel, unchanged from the January report.

USDA tweaked global ending stocks to 288.03 mmt, just under last month’s estimate of 288.08 mmt and within analysts’ pre-report estimates.

Australian wheat production was left unchanged from the January estimate of 15.6 mmt, despite widespread fires and drought in the country. USDA also left Russian wheat exports at 34 mmt, despite reports that the Russian government would soon restrict exports.

Wheat stocks-to-use declined by 1.7 percentage points to 43.4%.

WORLD PRODUCTION (million metric tons) 2019-20
Feb Avg High Low Jan
CORN
Argentina 50.0 49.8 51.0 48.0 50.0
Brazil 101.0 100.8 101.0 99.0 101.0
SOYBEANS
Argentina 53.0 53.1 54.0 52.5 53.0
Brazil 125.0 123.8 125.0 122.5 123.0
U.S. ENDING STOCKS (Million Bushels) 2019-20
Feb Avg High Low Jan 2018-19
Corn 1,892 1,856 2,017 1,667 1,892 2,221
Soybeans 424 448 586 320 475 909
Wheat 940 953 999 900 965 1,080
WORLD ENDING STOCKS (million metric tons) 2019-20
Feb Avg High Low Jan 2018-19
Corn 296.8 297.5 299.5 295.0 297.8 320.4
Soybeans 98.9 97.2 102.9 94.2 96.7 110.3
Wheat 288.0 287.2 288.8 280.0 288.1 278.1

Coronavirus continues to be talked about.  Markets are just not sure what to do at this time, in this phase with the Central Banks continue to print money & China in continued lock down.  More time is needed to gain clarity on how long the demand side hiatus will last.  Markets will continue to struggle.  Any good news could make the markets take off-but any stagnate bad news will have some ill effects.   New Zealand weather-could have an effect on our milk prices here in the United States.   Shawn shares his thoughts on how hogs are some of the hardest hit when a pandemic starts, but they are the first to reverse when things start to turn around.  Australian drought starting to see some rains-that will play in the cattle markets. 

MANHATTAN, Kan. — Grain Craft, the largest independent flour miller in the nation, has increased its commitment to improving wheat quality with another gift to the Kansas Wheat Commission Research Foundation (KWCRF). The gift will build upon previous support of research to improve wheat quality and yield through proper fertility management.

“Preliminary results from the research indicate there is a strong correlation between proper fertility management of wheat by farmers and not only the quantity, but quality of the protein produced,” according to Romulo Lollato, Wheat Production Extension Specialist at Kansas State University in Manhattan.

Grain Craft’s contribution makes the company a lead sponsor of the Fields Forward Campaign. Fields Forward is the campaign to raise $4 million for the KWCRF. The three focuses of the campaign are funding of ongoing wheat research, developing future research talent, and building funds for the long-term support of wheat research facilities and technology. More information is available at www.fieldsforward.org

“Grain Craft has led by example as a liaison between its customers and wheat scientists,” said Justin Gilpin, CEO for the Kansas Wheat Commission. They educate their customers about wheat quality while communicating those quality needs upstream to the research community. That dialogue is invaluable.”

“Grain Craft is committed to sourcing wheat with excellent milling and baking characteristics,” said Alan Koenig, Chief Supply Chain Officer for Grain Craft. “We are proud to further our support of the ongoing improvement of wheat quality and the advancement of quality for the entire supply chain.”

Grain Craft has a longstanding relationship with the Kansas Wheat Commission and Kansas State University. The company has supported each with collaborative partnerships, special funding and data analysis assistance throughout the years. In addition, Grain Craft participates in the internship program which is fielded through the KSU Grain Science department.

Grains struggled in the Thursday trade.  Overall commodity weakens.  World Health Organization continues to talk about the Corona Virus.  The chatter has been the beans & how hard they were hit.  Wheat performance though is somewhat encouraging-even though we saw negative numbers.  Fear traded markets. Brazil real & how it is affecting our export opportunities in the U.S.   ASF & the vaccine.  Limit down hogs.  Cattle markets had an “okay” type of day.

Heather Ramsey, ARC Group, talks China, Corona Virus, flow, and Brazilian soybeans. The Corona Virus kept the entire market space in a fear grip for most of the trading day. China is considering extending is Lunar New Year celebration in an effort to curb the spread of the virus.  Export inspections were not exciting and mostly expected. Except for wheat which came in below analysts expectations. Brazilian soybean harvest is about 9% behind where it was a year ago.

There are plenty of factors currently impacting the market trade Ramsey shows how timing over historical periods are still very important to a farm marketing strategy.

Ramsey says, “As farmers were worried about protecting from lower prices. We can always handle higher prices by selling more.”

Factors still moving the markets include China as we move 7 days into that 30 day agreement.  Not a lot of movement talked about to this point.  Kind of leaves us on the fence & following technical.  Wheat continues to trek higher until today-but why is it going higher.  Current status of South American weather & crop progress.  Livestock market…Chinese holiday-sickness…people moving through the country.  ASF-is there concern with the week long holiday coming up for China?

 

Ag Secretary Sonny Perdue talked over the weekend about his willingness to make changes in National Ag Statistics Service methods of crop data collection.

A Farm Journal article says during 2019 and it’s many challenges, many farmers were openly questioning the crop projections that were coming from NASS throughout the year. Perdue admits that he had some concerns about their crop reports and the survey methods NASS uses. “In fact, it was kind of paranoia in light of all the prevented planting and other kinds of things that were falling on us,” he recalled. “We got a little conspiratorial too, thinking NASS was also out to get us.” He thinks the NASS numbers that took the market by surprise last June might have been more correct than the market ultimately was in its reaction.

However, that doesn’t mean Perdue thinks the methodology for estimating crop size couldn’t be improved. “We’re going to get better,” Perdue says. “If you’ve got an idea about how we can better use electronics, or maybe an app for better surveys, we’d love to hear about it. We’re open to the kind of ideas of using modern technology to get you the best data that you can use to make plans for your farm.”