Weekly Market Recap


Grains

Talks between the US and Mexico are continuing in an effort to find a solution to immigration issues before a 5 % tariff on all Mexican goods into the U. S. becomes effective on Monday June 10th. Wire stories say talks are progressing and that Mexico has offered to send troops to it border with Guatemala in hopes of stemming the tide of undocumented migrants entering Mexico on their way to the US.  Cofco International is said to be preparing to spend $200 million dollars in Brazil over the next two years for logistics and storage in hopes of expanding shipping volumes for Cofco by 7-10 % over the next five years. The Federal Reserve is said to be thinking about making an interest rate cut maybe as early as the June meeting but more likely in July. The cut is being mulled in response to President Trump’s use of tariffs. Ag Secretary Sonny Perdue still has not given and additional answers about prevent plant acres and MFP payments as he travels to Florida and Georgia to talk about the just signed disaster aid bill. He may wait until Tuesday when he and President Trump travel to council Bluffs Iowa.

 

Corn

China says they will allocate nearly $72 million dollars to fight, prevent and control the armyworm infestation that has been found in 18 provinces so far. Some unconfirmed reports hit social media circles late yesterday that Mexico may have bought up to 40 cargos of corn from Brazil, ahead of possible U. S. tariffs next week. Ukraine has exported 47.3 million tons of grain so far in the 18/19 marketing year compared to 37.4 million tons at the same time last year. Lots of talk in the market as to corn being shipped into the U. S. from South America. Some sources are saying 5-10 cargoes of corn from Brazil are to be loaded onto ships to the U. S. between September and January, while others are saying an additional 1 million tons of corn is to come to the U. S. from Argentina and Paraguay.                           

Corn exports account for 27.9 million tons of the total. Consensus seems to be that Monday’s Crop Progress report will show that 80-82 % of the corn crop will have been planted in the U. S. by Sunday. The first look at corn crop ratings will also be included in Monday’s report. Export sales for corn were terrible this week. Sales for 18/19 were a negative 8,800 metric tons vs trade estimates of 500,000-800,000 metric tons. Sales for 19/20 were 23,500 metric tons vs estimates of 50,000-250,000 metric tons.   Trade estimates for Tuesday’s corn yield are 172.4 bushels per acre and the US corn production number is estimated at 14.251 billion bushels. US ending stocks are pegged at 2.123 billion bushels for old crop and 1.917 billion bushels for new crop. World ending stocks are pegged at 325.44 mmt for old crop and 304.96 mmt for new crop.

                    

                        

                                                             

Wheat

Canadian wheat sales to China reached a 14 year high despite a diplomatic spat between the two countries. China bought 1.5 million tons of wheat from Canada from August 2018 to April 2019. That total doubles the pace from a year earlier and is the most wheat China has bought from Canada since 2004-2005.  Spanish farmers are expected to harvest 25 % less soft wheat and 40 % less durum wheat this year. Overall winter grain harvest is expected to be to about a 30 % drop from last year’s crops due to ongoing dryness. Russian farmers have planted 10.8 million hectares of Spring Wheat so far for the 19/20 season compared to the 8 million hectares that had been planted at the same time last year. The increase is reportedly due to the warm weather and favorable soil moisture levels across the spring wheat regions. Trade estimates for Tuesday’s US wheat production is 1.883 billion bushels for all types of wheat. US ending stocks are estimated at 1.121 billion bushels of old crop and 1.118 billion bushels of new crop. The world ending stocks estimates are 247.70 mmt of old crop and 290.00 mmt of new crop.

 

Soybeans

Russia and China have signed a series of documents that will allow Russian exports of soybeans, rapeseed, sunflower seed meal, oilseed cake and beet pulp to expand into China. A private analytical firm estimated soybean planted acres @ 85.037 million, with a yield of 51.1 BPA, leading to a production estimate of 4.313 billion bushels. Next week’s WASDE report will be very important to price direction for the summer. Trade estimates for Tuesday’s soybean yield are 49 bushels per acre, and the US production is estimated at 4.123 billion bushels. US ending stocks are estimated at 100.4 billion bushels for old crop and 983 million bushels for new crop. Estimates for world ending stocks are 113.33 mmt of old crop and 112.99 mmt of new crop.

 

Energies

Following talks with his Russian counterpart Novak, Saudi energy minister al-Falih said OPEC+ is likely to extend production cuts into the second half of 2019. US sanctions against Venezuela will now include diluents, which would further reduce production in an already tight heavy crude oil market.