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For the farm community, beginning the week with higher grain/soy markets can be akin to awakening to a bright and sunny morning as everything just comes across as a bit more cheery. Still, even when that has occurred one cannot help but think there could be dark clouds lurking just beyond the horizon and this morning it would appear that they have wasted no time rolling in. Corn beans and wheat have all three now returned to the negative side of the ledger. This should really come as no surprise as these markets just appear to be making good in the reversals and pressure that we witnessed late last week and I find little in the news this morning that would have suggested we should do otherwise.
Reports from South American suggest good progress is occurring down there. AgRural now estimates that the Brazilian bean crop is 26% harvested, which would be 3% ahead of last year and 8% ahead of average. Yield reports continue to remain solid and this week Dr. Cordonnier left his production estimate unchanged at 105 MMT with a neutral to higher bias moving forward. Full season corn harvest stands at 14% complete which is 11% behind last year but with solid yield reports. Safrinha corn planting is estimated to be 36% complete which is around 4% ahead of average. Further south in Argentina rains have returned but evidently nothing that would be deemed detrimental. What was lost to flooding is lost so you cannot kill it a second time. Dr. Cordonnier has left production estimates unchanged at 54 MMT for beans and 36 MMT for corn.
About the only positive fundamental items that I have seen this morning were COFCO increasing the projected Chinese bean imports by 3MMT due to increased feed demand and another report out of China that up to 110 MMT of corn in reserve is considered unfit for man or beast. I can only imagine that is a conservative estimate. Additionally, in the daily system the USDA announced a sale of 269,296 MT of corn to Japan split between this crop year (104,704 MT) and 2017/18 (164,592 MT), 111,200 MT sold to unknown destinations for this year and then 138,650 MT of wheat spilt between 92,650 MT for this year and 46,000 MT for next.
Macros should be somewhat of a mixed influence this morning as we do at least have energies on the rebound but metals are lower and the U.S. dollar has extended the strength of the past couple weeks.