Sitting high

This week's FarmLead look at a boos in grain markets due to several factors.

Grain markets got another boost to its spring rally on Friday, June 10 with the U.S.D.A.’s monthly reporting of their world agricultural supply and demand estimates. Some warmer temperatures are in the forecast for the middle of June across many parts of North America’s major growing regions, but sporadic rains are limiting the concerns.of negative effects on crop development. Between the watching of the weather and the switching of some numbers of the demand side of the table, the market continues to sit at yearly highs.

On the demand switch side of things, well-known South American production issues pushed the U.S.D.A. to give more business to U.S. corn and soybean tables. Specifically, U.S. corn ending stocks were still seen at a massive 2 Billion bushels by the end of the 2016/17 marketing year while U.S. soybeans carryout was decreased by 45 million bushels to 260 million. For the current crop year, almost 100 million bushels were trimmed from corn for a 1.8 Billion carryout by the end of 2015/16 while 30 million bushels in demand were added to soybeans, equating to a new carryout number of 370 million bushels. Overall, between the aforementioned weather premiums and demand switching to North America, the bullish sentiment seems right but there are definitely still many unknowns at this point in the growing season.

Wheat was the row crop that got sewered in the report by further larger-than-expected inventories. 2016/17 ending stocks in the U.S. were increased to 1.05 Billion bushels, thanks to production being bumped by almost 80 million bushels to a massive 2.08 Billion bushel crop. This upgrade to the U.S. crop accounted for most of the change on the world wheat balance sheet, except for Russia’s wheat crop upgraded by 1 million tonnes to 64 million tonnes, which meant their exports were increased by 500,000 to a massive 25 million tonnes in 2016/17. The other interesting caveat on the wheat front was the E.U.’s crop size getting upgraded by 1 million tonnes to a 157.5 million tonne crop. This contrasts some of the negative headlines on France’s rainfall over the past couple of weeks.

All the focus now seems to be on weather for the next few weeks, and the June 30 Acreage report from the U.S.D.A., which should show just how many soybeans got bought in the last couple of months. Canola will enjoy some continued to support from soybeans, as well as from the fact that Malaysian palm oil stocks continue to sit at 5-year lows. Ultimately, wheat continues to enjoy the bullish pull from corn and soybeans but with new crop supplies coming online with winter wheat harvests, the fundamentals remain bearish. As for corn and soybeans, the reason for its rise to greatness continues to be spec buying and U.S. demand substitution. Until the crop is a bit more emerged we’re likely to see a few more days/weeks at these high levels.

To growth,

Brennan Turner

President & CEO | FarmLead.com

Brennan Turner is originally from Foam Lake, SK, where his family started farming the land in the 1920s. After completing his degree in economics from Yale University and then playing some pro hockey, Mr. Turner spent some time working in finance before starting FarmLead.com, a risk-free, transparent online and mobile grain marketplace (app available) that has moved almost 250,000 MT in the last 2.5 years. His weekly column is a summary of his free, daily market note, the FarmLead Breakfast Brief. He can be reached via email (b.turner@farmlead.com) or phone (1-855-332-7653)

 

Just Posted

Woman steals truck from Ponoka gas station while being fueled

Ponoka RCMP pursued and located the woman in a tree after several other incidents

Snow flies at Ponoka Legion’s Flags of Remembrance ceremony

Despite the chilly weather, 128 Maple Leaf flags were raised at Ponoka’s Centennial Park

Ponoka senior Broncs take second win of season

The Broncs defeated the Wetaskiwin Sabres at home

Young Ponoka barrel racer one to watch

Janae McDougall won Lakeland and Wildrose Rodeo Association peewee barrel racing

Ron Orr to return for another run as MLA

Lacombe-Ponoka UCP contest won by incumbent MLA

Video: Flyers new mascot ‘Gritty’ a bearded, googly-eyed terror

The Philadelphia Flyers unveiled their new mascot Monday, and as one would expect of the team that gave us the “Broad Street Bullies,” he’s far from cuddly.

Trump boasts of America’s might, gets laugh at UN

President Donald Trump received an unexpected laugh at the United Nations General Assembly on Tuesday.

Federal use of A.I. in visa applications could breach human rights, report says

Impacts of automated decision-making involving immigration applications and how errors and assumptions could lead to “life-and-death ramifications”

Veterans Affairs ordered to take second look before supporting vets’ relatives

Liberal government ordered officials to adopt a more critical eye

Ottawa working to iron out kinks in public alert system

The alerts are being credit with saving lives during last week’s tornadoes

Assault charge withdrawn vs. ex-Jays pitcher Roberto Osuna

Former Toronto player agrees to peace bond

UPDATED: Bill Cosby gets 3-10 years in prison for sexual assault

Judge also declared the disgraced comedian a ‘sexually violent predator’

U.S. worker charged after video shows him spitting on customer’s pizza

Jaylon Kerley of Detroit is charged with a felony count of food law violations

Robbery report at outlet mall turns out to be fake: police

Leduc RCMP respond to weapons complaint at premium outlet collection mall

Most Read