Barge Freight Starting to Ease a Bit on MS/IL River but Flooding Still Affecting OH River
Barge rates have been trading at seasonally adjusted 5-year highs as high water levels have caused issues with barge movement. This has kept basis levels under pressure in the past month.
Yesterday saw some movement lower on barge costs along the MS and IL river which helped give spot basis values a boost by 2 to 4 cents.
But, along the Ohio river flooding and freezing is still creating challenging conditions. As a result, basis levels there continue to be deflated.
The most recent 30-day forecast shows wetness in the ECB expected to stay South of the OH river which could help ease flooding there and should give basis some upside potential.
South America Holding Up in Later Half of Growing Season
Major grain and oilseed producing areas of Brazil and Argentina will largely avoid extreme weather in the coming weeks.
Brazil soybean harvests now exceed 50% of sown area, while second corn sowings exceed 90% and 75% in Mato Grosso and Paraná, the two biggest states.
Despite recent mixed weather and localized yield losses due to excessive rainfall or freezes, Argentina corn and soybean is production still on track for a major rebound from last season.
What it means for U.S. Farmers: It seems unlikely we are going to see any major hiccups for production on SA grain this year. Certainly, bigger crops are expected versus last year and the trade only looks for a modest dip in Brazil’s soy crop to 115 MMT vs 117 MMT from USDA on Friday. Hard to mount a rally in a growing supply paradigm.
Chinese Canola Imports from Canada Rejected
China's foreign ministry said they discovered "hazardous pests" in samples taken recently from Canadian canola imports.
Canada and China are locked in a dispute over trade and telecoms technology that has ensnared the chief financial officer of Huawei Technologies.
China buys about $1.9 billion per year in canola from Canada.
What it means for U.S. Farmers: Certainly other farmers losses are U.S. farmers gains. While not a huge impact like soybean tariffs, this could open the door for more Chinese purchasing of soybeans if we get a trade deal inked at the end of this month.
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