February 28, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1145

India Looking to Import Corn

Country faces domestic supply challenges amid growing demand from livestock sector

India Looking to Import Corn

India to Import Estimated Tariff-Free 500-1 MMT of Corn This Year

Facing domestic supply challenges amid growing demand from the livestock sector, it is estimated that India may import 1 MMT of corn this year.

Indian corn production is estimated at 16 MMT down from 20.2 MMT the previous year.   

Below-normal monsoon rains and an infestation of the army worm, which devastated African corn crops in 2017, have slashed India's corn output and boosted prices, increasing the chances the government will grant duty-free corn imports for the first time since 2016.  

The shift to imports in the world's seventh-largest corn producer, which typically exports to Asia, highlights the breadth of the crop losses due to the drought and army worm.   

Assumptions are that India will import a bulk of the corn from Ukraine. India is a non-GMO corn importer.

How Does This Impact The U.S. Farmer? Lots depends on the volume and timing but this could be a positive development for the U.S. corn export program. If India imports above 500 KMT from Ukraine the possibility exists that the demand pull reduces supplies and causes a shift in the export structure which could create an opportunity for U.S. corn.      

Export Sales Announcements

Export sales of 168,000 metric tons of corn for delivery to Mexico during the 2018/2019 marketing year.

Export sales of 133,000 metric tons of corn for delivery to South Korea during the 2018/2019 marketing year.

           

            

Russia Not Planning Any Export Restrictions    

On Wednesday, Russia’s Agriculture Ministry announced that the country will not impose restrictions on grain exports this marketing year.

The statement comes after some grain traders who meet with government officials on a “regular basis” to discuss domestic supplies had speculated that Russia would make policy moves to implement export controls after some domestic prices had sharply increased during January and early February.  

Russia, the world’s largest wheat exporter, said that its forecast for 2018/19 grain exports of 42 MMT had been set.    

Russia has already exported 33.4 MMT of grain: barley, corn and wheat, so far this season, unchanged from a year ago.  Wheat exports have totaled 26.9 MMT. Recently, shipments have been slowing down due to seasonally lower supply which has caused a rise in Russian export prices.

How Does This Impact The U.S. Farmer?  From a wheat perspective this news is another bearish input.  The steady rise in Russian FOB wheat prices has been occurring for the last 6 weeks as supplies are tightening.  The recent GASC purchase saw a bulk of the wheat sales from France and Romania and a small volume from Russia. This could be a signal to the HRW producer that some export volume could start working back to the U.S.   

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

February 27, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1173

U.S. and China Negotiating Ethanol Exports

Trade negotiators have asked China to reduce tariffs

U.S. and China Negotiating Ethanol Exports

U.S. and China Negotiating Ethanol Exports And Removal of 70% Tariff    

Agriculture Secretary Sonny Perdue said on Tuesday that U.S. trade negotiators have asked China to reduce tariffs on U.S. ethanol, but it was not immediately clear whether Beijing was willing to oblige.

Last summer Beijing imposed retaliatory tariffs of up to 70% on U.S. ethanol shipments.  The U.S. is looking to reduce the tariff to 15%.

Following China’s tariff, U.S. ethanol exports have fallen to negligible volumes.    

How Does This Impact the U.S. Farmer? Like all other Chinese related agricultural trade items, the market demands details. China is moving toward implementing a nationwide E-15 ethanol program which will stress domestic state-owned corn reserves.  Many believe that China will have to import corn and ethanol to satisfy growing demand but volumes and time frames are necessary.           

Brazil Officials Find Weed Killer Glyphosate, Roundup, to be Non-Cancerous

Analysts at Brazilian health agency Anvisa have determined that the weed killer glyphosate does not cause cancer while recommending exposure limits as international pressure to reduce use of the chemical grows.

Companies such as Bayer AG and its Monsanto unit, which produces glyphosate-based weed killers and market the product under the Roundup brand, have faced intense legal challenges over allegations that glyphosate causes cancer.

Roundup is currently the largest commercial weed killer in Brazil.  

Monsanto faces $78 million in damages after a jury in California last year found that its products caused a man's cancer and the firm failed to warn customers of the dangers of its use.  Bayer AG is scheduled to go on trial again in California in a separate legal dispute from last year.

How Does This Impact the U.S. Farmer?  Not really a direct impact on the U.S. farmer but Brazil finding glyphosate based weed killers, Roundup, to be non-cancerous could help or enhance the country’s agricultural competitiveness.                 

  

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

February 26, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1080

Wheat Futures Decline

U.S. winter wheat acres are at multi-generational lows; futures curve structure incentivizes storing wheat

Wheat Futures Decline

Wheat Futures Decline to10-Month Low on Adequate Supplies

Chicago SRW, Kansas City HRW and French milling contract have all experienced sharp declines on recent supply issues.

Recent wheat purchases by Egypt’s GASC of 180,000 tonnes of wheat that saw business go to France, Romania and Russia that saw U.S. HRW and SRW excluded from the offer was a sign that U.S. wheat is the residual supplier to the world.  

Despite the premium in Russian FOB spreads with other origins in the region: Romania, and Ukraine, domestic supplies may not be as tight as market analysts perceive.  High domestic prices have stimulated farmer selling and the Russia's Agriculture Ministry continued sales of grain from its stockpile last week, when it sold 52,400 tonnes of wheat.  The Russian government has sold 1.36 MMT of wheat during the current marketing year.

At 28.3 MMT, Russia wheat exports are +8% YoY from July 1 - February 21.

An estimated 50 MMT Argentina wheat harvest has the country doing export business in Asian countries and is filling the export vacuum lost by the drought in Australia.  

Weekly CME registered HRW stocks at 106 MBU is slightly below the 2018 levels but has been at record levels for the most of the marketing year.  

How Does This Impact the U.S. Farmer?  As HRW wheat has begun to break dormancy there will be some weather risks that the crop will incur but these are annual risks.  With U.S. winter wheat acres at multi-generational lows and a futures curve structure that incentivizes storing wheat, the domestic and global supply and demand fundamentals are not providing much a reason for a widespread price rally.      

USDA Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tons of soybeans for delivery to Mexico. Of the total, 48,000 metric tons is for delivery during the 2018/2019 marketing year and 72,000 metric tons is for delivery during the 2019/2020 marketing year.

 

 

2019/20 South African Corn Crop Estimated At -20% YoY

South Africa is likely to harvest 20 percent less maize in 2019 compared with the previous season after drought conditions delayed plantings in some corn growing areas.  

South Africa’s corn harvest is expected to consist of 5.045 MMT of white corn and 4.917 MMT of yellow corn, which is primarily used as animal feed.  

The government's Crop Estimates Committee (CEC), which will provide its first production forecast for the 2019 crop on Wednesday, is seen lowering the harvest at 9.96 MMT, down from the 12.510 MMT harvested during the 2018/19 season.

The crop, which is expected to be slightly less than South Africa's annual corn consumption of around 10 MMT, benefited from improved rainfall conditions after plantings were delayed particularly in the western part of the maize belt.  

How Does This Impact he U.S. Farmer?  While the U.S. corn producer is not an immediate beneficiary the decline in South African corn production, the tightening supplies could start to stress regional exportable feed commodities. While U.S. corn and feed inputs could struggle over the next few months inside a competitive global export market, U.S. corn will have go find a way to be competitive against Argentina, Uruguay and Brazil corn.  

        

  The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

February 25, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1093

Bayer Faces Second Trial Over Roundup

Lawsuit alleges weed killer causes cancer

Bayer Faces Second Trial Over Roundup

Bayer AG Faces A Second Trial Over Roundup

In a California state court, Bayer AG is facing a second U.S. jury over allegations that its weed killer Roundup causes cancer.
A lawsuit by California resident against the company is scheduled to begin on Monday in federal court. The trial is also a test case for a larger litigation. More than 760 of the 9,300 Roundup cases nationwide are consolidated in the federal court in San Francisco that is hearing Hardeman's case.

Bayer denies all allegations that Roundup or glyphosate cause cancer, saying decades of independent studies have shown the world's most widely used weed killer to be safe for human use and noting that regulators around the world have approved the product.
Evidence of corporate misconduct was seen as playing a key role in the finding by a California state court jury in August that Roundup caused another man's non-Hodgkin's lymphoma and that Bayer's Monsanto unit failed to warn consumers about the weed killer's cancer risks. That jury's $289 million damages award was later reduced to $78 million.      

USDA Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 279,400 metric tons of corn for delivery to Mexico. Of the total, 88,500 metric tons is for delivery during the 2018/2019 marketing year and 190,900 metric tons is for delivery during the 2019/2020 marketing year.

China Commits To Purchase 10 MMT Of U.S. Soybeans

On Friday, February 22, U.S. Secretary of Agriculture Sonny Perdue said on Twitter that the U.S. had negotiated China to purchase 10 MMT of U.S. soybeans.  

Secretary Perdue’s comments on Twitter mentioned that the purchase by China is "show of good faith" and "indications of more good news to come".

While the news lacks any time-lines for when China will commence with the purchases, the futures markets responded positively as Globex futures were sharply higher and at their highest levels in premarket trading.    

According the USDA’s latest export records, the U.S. has exported only 7.4 MMT to China, which is well short of the 26 MMT of export purchases at the same point last year.  

How Does This Impact The U.S. Farmer? Clearly another positive step forward for U.S. agriculture and in particular the U.S soy producer.  While the news lacks any of the details of shipping dates, China’s commitment to purchase 367 MBU of soybeans reduces the USDA’s estimated 910 MBU carry-out for 19/19 while lowering the forecasted 19/20 carry-out from 845 MBU to 477 MBU.             

  

    

  

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

February 22, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1145

Global Launch of Enlist E3 Soybean

Enlist E3 is expected to be planted on more than 10% of soybean acres in the U.S. and Canada next year

Global Launch of Enlist E3 Soybean

DowDuPont Wins Final Approval For Global Launch of Enlist E3 Soybean

DowDuPont Inc., won the final international regulatory approval needed, from the Philippines, for a global launch of its new line of GMO soybeans called Enlist E3.  

The approval means seed companies can sell the Enlist E3 soybeans, to farmers for planting as early as this spring without worrying about taking extra steps to keep the soybeans out of most global export markets.

Developed with Iowa-based MS Technologies, Enlist E3 is the first soybean genetically modified to withstand sprays from three popular weed chemicals - 2,4-D, glyphosate and glufosinate.

Final approval of Enlist E3 from the Philippines was an critical step in the global approval process as the country is one of the largest imports of U.S.  soybean meal. U.S. farmers and seed sellers have been waiting for the Philippines to approve imports of Enlist E3 since China, cleared the product in January.  

Enlist E3 is expected to be planted on more than 10% of soybean acres in the United States and Canada next year. The companies plan to license the product to other seed sellers and are in talks with more than 100 brands.  

How Does This Impact the U.S. Farmer? The approval of DowDuPont’s new GMO product has the ability to offer the U.S. producer another seed option in a market pretty much dominated by Bayer.  Approval by China and the global community is key. Please contact your FBN representative for more information about Enlist E3.       

  

USDA’s Releases First 2019/20 U.S Corn & Soy Balance Sheets  

On Friday morning the USDA released its first estimates of their 19/20 crop year supply and demand estimates for corn, soybeans, wheat and cotton.

Corn.  The corn production + 3% YoY at 14.890 BBU, based on an average yield of 176.0 BPA.  2019/20 crop year carry-out is estimated at 1.650 BBU vs 1.73 BBU for 18/19.

Soybeans. USDA estimates the 19/20 soy production at 4.175 BBU -8% YoY. The carryout is estimated at 845 MBU -65 MBU YoY.  The estimated soy carry-out would be the second largest on record.   

What Does This Mean For U.S. Farmers? The initial glance is bearish new crop soybeans and neutral/supportive new crop corn. Obviously there are a lot of moving parts with the USDA’s supply and demand equations and at the moment potential Chinese demand could be a large part of the demand calculus that is not being accounted.  The USDA’s estimate will stand for a few months until the government releases the first regularly published WASDE for the 19/20 crop year in June.       

  

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)


 

February 21, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1237

China to Propose $30 Billion in Annual U.S. Ag Imports

The futures markets seem to be taking news more seriously than previous reports from the White House

China to Propose $30 Billion in Annual U.S. Ag Imports

China To Propose $30 Billion in Annual U.S. Agricultural Imports  

Bloomberg News is reporting on a story that China has proposed to import $30 billion of U.S. agricultural products on an annual basis.   
At the moment, the details are developing, but the comments are more concrete than in the past. The futures markets seem to be taking the news more seriously than previous reports that came from the White House.   
What Does This Mean for U.S. Farmers?  At the moment the news seems to be putting in a floor in corn is supportive wheat, corn, soy and hog futures. While the details are thin, the growing probability of China committing to some type of metric and providing a time frame is a positive.    

Kinder Morgan Expanding Chicago Argo Terminal Ethanol Capacity

Kinder Morgan will expand barge-loading capacity at its ethanol terminal in Chicago to help relieve a supply glut there that is driving down global prices for the biofuel.  

The move is designed to help clear the some of the building inventory levels that has helped suppress prices over the last few months.   

Tens of thousands of barrels of ethanol change hands at the Kinder Morgan Argo terminal daily, and prices there are used as the benchmark for deals across the country, and are also baked into international contracts.

Currently, Argo can unload roughly 120 to 150 tank cars of ethanol each week, or roughly 4 million gallons, and can load two barges, or roughly 1.2 million gallons, at a time.  

Plans to expand existing capacity include adding 50,000-gallon storage tank and increasing the barge loading/unloading capacity.  The increased capacity should help reduce the chances of a big supply glut at the 1.3-million-barrel storage hub.  

How Does This Impact the U.S. Farmer?  Adding capacity and increasing the loading and unloading efficiency to one of the largest ethanol hubs has the ability to help reduce the supply glut and support corn and ethanol cash and futures prices.  Modernizing the Argo terminal is a long term project, but moving ethanol out of the country to a large centralized shipping location has the possibility of providing long term support for regional corn basis.     

U.S. Wheat Not A Part of Egypt’s GASC 360,000-Ton Purchase  

Egypt’s commodity purchasing arm, GASC, purchased 360,00 tons of French and Romanian wheat.  

The purchase was made up of 180,000 tonnes of French wheat, 60,000 tonnes of Romanian wheat, 60,000 tonnes of Russian wheat and 60,000 tonnes of Ukrainian wheat.  

U.S. SRW and HRW offers were not included.     

What Does This Mean for U.S. Farmers? The lack of U.S. offers should be a concern and certainly reinforces FBN’s position that U.S. wheat is the residual supplier of wheat to the world. Apparently French wheat prices were consistently cut during the negotiation to help gain volume.  The current level of U.S wheat stocks the export volume of HRW in particular needs to accelerate soon.  

  

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

February 20, 2019 | Coach’s Corner | Greg Martinelli | Views: 1337

Top 3 Things to Get More Out of Your Sales Meetings

Use these action items to get more out of every meeting

Top 3 Things to Get More Out of Your Sales Meetings

Almost robotically, we attend the quarterly or annual sales meeting and follow the exact same pattern. We race to find our group – our closest peers – our posse.

Once there, we covey like a flock of quail. Where one goes, so goes you. What do you do while in your covey? Complain that you don’t get anything from the meeting, wish it was over and then you race out of the meeting like someone yelled “fire” when it is finally over.

Here’s my advice. First, “Stop it!” Quit acting like your time is so important that you can’t spend a few minutes and learn something or help someone else to learn something. Secondly, use the following three action items to get the most of your time.

  1. Meet someone new: Watching the first few hours at a meeting reminds me of the term, “old home week." 
    Everyone searches for their closest friends, reconnects and tells the same old stories from the past.
    “Remember when Lloyd backed the boss’ car into the lake at that sales meeting?” “Oh yeah, or when Donnie fell asleep and fell out of his chair at the sales meeting, 20 years ago!”  
    It feels comfortable in this socially awkward environment to find our closest friends and rehash old stories.
    As salespeople, we spend all our time alone in our cars or across the table from a customer. This large group setting can be intimidating, even for someone who meets people all day long. Quickly, get past that need to reconnect with those you know really well. Venture into the meeting room and introduce yourself to someone you haven’t met or don’t know as well. Excuse yourself from your posse and make an intentional effort to sit at dinner with a completely different crowd.
    It’s just an hour or so. If you don’t like them, you can go right back to the safety of your group after dinner. When selecting a new person or group to connect with, don’t just focus on who you should meet to better your sales or connections.
    Sure, it’s good to meet and network with someone higher in the organization. However, just look for someone new. You never know how that interaction will help the company.
    Meet someone in operations, administration, customer service, distribution, or accounting. Trust me, they feel as out of place at these meetings as you do.
  2. Find a new way to participate: This one requires a bit of a stretch on your part, but it’s worth it.
    Look for a new or different way to participate. If you complain that you don’t get anything out of the meeting, maybe you should share your vast knowledge.
    Offer to give a presentation on a topic you know well or that has been working for you. If you don’t want to be on stage all by yourself, then suggest a panel topic and offer to be one of those on the panel.
    You attend industry events throughout the year, which means you see some great or not so great presentations. Bring one of those ideas back to your meeting. Event organizers are always looking for ideas to make their meetings better. Share with them what you see at other meetings that is working.
    Another opportunity is to suggest a “subset” meeting or topic. Big or all-inclusive meetings have to stick to topics that are apply to everyone. Suggest a time period for a subset group to meet. Examples of this could include in a group of dairy nutritionists, those that sell inoculants/preservatives, or in a group of agronomists that focus on corn/beans/wheat, suggest a small group meeting on selling into a specialty market: fruit, vegetable, organic, etc.
    At this year’s trade shows, hemp production has generated a lot of attention. While still in the early stages of forming, it might be an opportunity in certain areas.
    Here’s one last suggestion for finding a new way to participate: offer a new idea for the sales meeting activity.
    Typically, what social activity does every sales meeting have? Golf. Now, if you like golf, that’s great. One of my most proud achievements at our annual sales meeting was the fishing alternative.
    From the 60’s, 70’s an 80’s, the only activity the sales meetings had was golf. While many enjoy the game of driving around in go-karts and swinging a tiny stick at a little white ball 18 times, it’s not my favorite activity. Plus, we were usually in some of the best fishing areas in the nation.
    Organizing a “fishing trip” option, my first sales meetings only got a few people to opt in. Within a few years, our fishing option was as much as half the team. One of our salespeople actually met and married one of the fishing guides I hired. All because of a suggestion.
  3. Connect with the external attendees: Your company will bring in speakers, trainers, experts, vendors, etc. to speak at your sales meeting. After they get done presenting, connect with them.
    While your company only hired them to present for a short period of time, they most likely have a lot more information or topics in their business. Most will gladly share this with you, if you ask.
    Sure, they might want to charge you for it, but many will just appreciate the interest and gladly help you with information or connections.
    They work on their topic every day and have a lot more information at their disposal than you might think. I’ve had some great discussions and networked with some great people after they approached me at the end of my presentation.
    One really great way to engage a speaker is to ask if you can offer some feedback. Trust me, we always want to know how we can improve or connect our message better with our audience. Keep it constructive and it should come across as a positive thing.

For those of you lucky enough be in the position of planning a meeting, here’s a suggestion to make your next meeting better. Force the above three action items. Schedule time and activities that force people to meet someone new, allow people to participate in a new way and engage the external attendees. I call it “forced participation.” Yes, everyone will complain when you make them do it, however, they will like the benefits and the change up.

I was going to end this with a recommendation to quit complaining about meetings, but I really don’t think that’s going to happen. So, go ahead and complain. Then, use these three action items to make your next sales meeting a blast.

Good luck and enjoy your next sales meeting!

For more Ag sales training topics and discussions, go to GregMartinelli.net.

February 20, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1295

Reuters Poll Shows Brazil Soy Production Set to Decline

Brazilian soybean crop is being reduced again with most estimates falling below 115 MT

Reuters Poll Shows Brazil Soy Production Set to Decline

Brazil Soy Production Could Decline by 4% YoY.  Corn Production Rising

A recent Reuters poll showed that the Brazilian 19/2 soybean crop is being reduced again with most estimates falling below 115 MT.  

The decline in soybean production follows a trend that started in early January as dry conditions and heat have eroded crop conditions.

The average production estimate from the analysts is 114.9 MMT.  This is a sharp decline from the 122 MMT crop that was being forecasted in December.

Brazil's second corn crop, which is planted after the soybeans are harvested, is expected to grow by 21%,to 65.3 MMT this season, on an expected expansion of planted area and higher yields, the poll showed.  The 65.3 MMT production would be +12 MMT YoY.

What Does This Mean for U.S. Farmers?  Not much for the moment as the world agriculture trade is more focused on any details of corn export to China.  Using the current FOB spreads the boost in Brazilian corn production would be unwelcome for the U.S. farmer as it means more corn and feed inputs available for export demand. The soy numbers are not a surprise as private estimates have been lowering the production values for almost two months.              

 

  

Trump: “U.S. corn sales to China are part of the ongoing trade discussions”

On Tuesday, President Trump confirmed that U.S. corn has been part of the bilateral trade negotiations between the two countries.  

While the comments did not contain any details on volume, timing or products the President was quoted as saying  “It’s going to be selling corn, but a lot of it, a lot more than anyone thought possible.”  

The mention of corn after the Chinese agreed to allow the imports of selected corn and soybean GMO varieties back in January.  

China has banned the imports of U.S. corn, DDG, containing the MIR-162 strain back in 2014 and expanded this non-science ban on products containing other strains.  

How Does This Impact the U.S. Farmer?  Clearly a step in the right direction for the U.S. farmer as corn exports are back on the negotiating table.  The Chinese corn “deficit” amide a national push to E-15 and a questionable stocks decline has the global corn trade wondering when the U.S. export ban could be lifted.  While the President did not include any details in his comments this should help frame the future discussion about price.

   

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

February 19, 2019 | Grain Hedge Insights | Kevin McNew | Views: 801

World Corn FOB Values Plummeting

World corn values were hit hard last week as Ukraine and South American markets turned sharply lower

World Corn FOB Values Plummeting

World Corn FOB Values Plummeting  

World corn values were hit hard last week as Ukraine and South American markets turned sharply lower while U.S. values mostly avoided the steep sell-off.

FOB values at Ukraine and Argentina eroded this past week relative to U.S. values. Current FOB values of foreign sellers have fallen by 25 cents/bushel relative to the U.S., making it a challenge for the U.S. to have an aggressive export program at U.S. prices.

What Does This Mean for U.S. Farmers?  As March approaches expect more private estimates of corn and bean acres to be the focus point inside the markets. The declines in soy and the moderate increase in corn could be friendly the back end of the curve if the Chinese make any concessions on exports. Spring wheat adding 1 MA is not friendly despite the reduction in HRW acres as there should be ample supplies of U.S. protein wheat.  

Saying Goodbye to El Nino  

Temperatures are falling enough to suggest El Nino conditions are fading, and while it is not officially ended, it likely will fade in the coming months. The most likely trajectory for the ENSO cycle is a “neutral” phase during the U.S. spring and summer months. That bodes well for big U.S. crops with some potential problems in Europe.

The North America summer outlook in its early stages favors a very cool/wet pattern. If it verifies, it would point to significant upside for all crops along the Canadian Prairies, U.S. Corn Belt, Plains, and Mississippi Delta regions. Such widespread favorable weather would bring back questions about record yield potential for both corn/soybeans, an issue to watch moving forward especially considering that the March-May outlook supports a beneficial rapid planting season in the Corn Belt.  

Europe could experience warmth/dryness to a large degree during June-August if the outlook verifies. This could benefit the winter wheat harvest, but points toward significant downside risks for spring wheat, corn, and soybeans.

How Does This Impact the U.S. Farmer?  Another year of ideal weather certainly does not spell great marketing opportunities in an already oversupplied grain complex.

 

Brazil at 36% Harvested for Soy Crop          

Brazil's soybean harvest has advanced to 36% of the planted area, 19 percentage points above this time last season as some farmers sowed the soy earlier and then speeded up harvesting due to dry and hot weather.

Consultancy AgRural said on Monday that in spite of being ahead of last year and above a 19 percent five-year average, harvesting slowed slightly over the past few days due to the return of the rains. Humidity, however, did not compromise the quality of the soy being harvested, AgRural said.

What Does This Mean for U.S. Farmers? An early soy harvest has two implications here. First, it gives world buyers a fresh market to buy beans at and puts more competition on U.S. soy traders. Second, it sets the stage for an early planting of the second season Safrinha corn crop. The earlier that crop is planted the better chance that Brazil farmers have of missing cold and dry weather late in the growing season that cut into yields.

 

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

February 15, 2019 | Grain Hedge Insights | Kevin McNew | Views: 1305

China Cancels Soybean Purchases

Cancellations were thought to be to private groups not government purchases

China Cancels Soybean Purchases

China Cancels 807 KMT of Soybean Purchases  

Soybean traders in China on Friday shrugged off recent cancellations of import orders as the global market worried it could be a sign of Beijing backtracking on its pledge to buy more American beans.
The cancellations were thought to be to private groups not government purchases.   
Among the cancellations were 807,000 tonnes intended for China and 444,000 tonnes for "unknown" destinations, which the market believes could also be China.
The news appeared to contradict the recent conciliatory tone between Beijing and Washington, and went against expectations of net sales of between 600,00-1 million MMT of soybeans.      
Currently China bought about a third of the beans it purchased from the U.S. in the 17/18 marketing year.   
How Does This Impact the U.S. Farmer?  Any news about China reverberates throughout the futures markets.  Positive or negative the soy markets are hypersensitive about all things China.  The cancellations to “unknown” feels like China, but is unverified. Whether these cancellations were from private or state-owned entities the result is a negative and a set back for the U.S. soy trade.  The soy market is starved for some clarity from the U.S/Chinese trade talks. Until that occurs, sharp swings in sentiment and price will remain the norm.

Export Sales Announcement

Private exporters reported to the U.S. Department of Agriculture export sales of 205,744 metric tons of corn for delivery to unknown destinations during the 2018/2019 marketing year.

 

Informa 19/20 Crop Forecast: Raises U.S. Corn and Lowers Soy Plantings  

In it’s latest crop predictions for the 19/20 U.S. crop year, Informa aka IEG Vantage, adjusted their corn acres to 91.6 MA vs 89.1 MA in 2018.   

2019 corn production is forecasted at 14.908 BBU and is based on a yield of 177.0 BPA.  2018 production was 14.4 BBU and yield was 176.4 BPA.

19/20 Soy acres are estimated at 86 MA vs 89.1 in 2018.

2019 soybean production is forecasted at 4.366 BBU and is based on a yield of 51.2 BPA. 2018 production was 4.54 BBU and the yield was 51.6 BPA.  

The firm's all-wheat forecast includes: 31.290 MA  of winter wheat - matching the USDA. Spring wheat is 13.640 MA +1 MA YoY and durum is 1.852 MA, -.27 MA YoY.

What Does This Mean for U.S. Farmers?  As March approaches expect more private estimates of corn and bean acres to be the focus point inside the markets. The declines in soy and the moderate increase in corn could be friendly the back end of the curve if the Chinese make any concessions on exports.  Spring wheat adding 1 MA is not friendly despite the reduction in HRW acres as there should be ample supplies of U.S. protein wheat.  

  

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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