Total versus Change in Pork Consumption
China is by far the world’s largest consumer of pork, eating over half the world’s supply. This also drives feed demand and this grain supply destruction. However, its per capita consumption is lower than many other large pork producing countries. Brazil and the Philippines are the largest cons...
Market Commentary: Some Bouncing Off the Week’s Lows
Except for soyoil and SRW, the market provided a rebound today for the agricultural commodity markets. Most contracts reflected their overnight closes. Key points for today and the week include the following: New contract lows were printed this week in soybeans, soyoil, SRW, and HRS. Only...
Sino-Ag Developments
EconomyLeaders gather this month for the annual Central Economic Work Conference with the view of another sub-par year ahead and the need for bold action to turn the economy around. Recent measures have included lowering the cash reserve requirements at banks so that more money is available for...
Sino-Ag Update
EconomyDeflation continues to be a problem with the Producer Price Index declining in November for the 26th month in a row. Consumer inflation was expected to increase 0.5 percent after rising 0.3 percent in October, but instead it rose by just 0.2 percent, a five-month low. Despite economic so...
Wasde Soybeans
WASDE Soybeans: 2024/25 U.S. soybean supply and use projections are unchanged. There was a significant increase in soybean oil exports by 500 million pounds to 1.1 billion. However, that increase was partly offset by reduction in food, feed, and other industrial use of soybean oil by 200 millio...
Wasde Corn
WASDE Corn: 2024/25 U.S. corn use for ethanol production is increased by 50 million bushels to 5.5 billion. U.S. corn exports are raised 150 million bushels to 2.5 billion. The result is that corn ending stocks are reduced by 200 million bushels to 1.7 billion. The season-average corn price rec...
Wasde Wheat
WASDE Wheat: 2024/25 U.S. wheat exports are raised 25 million bushels to 850 million bushels. U.S. wheat ending stocks are reduced by 20 million bushels to 795 million - which USDA notes is still 14 percent above last year. The season-average farm price is unchanged at $5.60 per bushel.USDA's g...
Sino-Ag Roundup 2
Meat DemandChina is the largest consumer of meat, consuming 27 percent of world supplies and while pork has been the dominate choice, poultry demand has been on the rise along with beef. Poultry is winning due to price and its health halo, and beef is viewed as a premium product. The result is...
Market Commentary: Grains, Soyoil Sink in Pre-Holiday Trade; Soybeans, Cattle Strengthen
Pre-Thanksgiving trade is usually a light-volume, range-bound affair with few fireworks, but this year’s market action offered more interest than most. Corn futures indeed traded a tight range, but did so with surprisingly heavy volume that likely belies a rash of fund selling. Fund selling was...
Sino-Ag Roundup
Trade WarDonald Trump hasn’t even been sworn into office and is already roiling currency markets. The yuan, Mexican peso and Canadian dollar all slid this week on Trump’s social media claim that he will add tariffs on these three countries unless they stem the flow of drugs and illegal aliens i...
Market Commentary: Corn Falls, Soyoil Rallies on Trump Tariff Plans; Hogs Hit New Highs
News from Washington continued to be the primary driver of CBOT price action again on Tuesday, with most of the day’s action coming from plans for new import tariffs from President-elect Trump. The other news from Washington is the USDA APHIS’ ban on live cattle imports from Mexico, due to the...
China-Brazil Bilateral at the G20 Summit: New Deals to Be Announced
The G20 meets in Rio de Janeiro this week, and Presidents Luiz Inacio “Lula” da Silva of Brazil and Xi Jinping of China have a bilateral side meeting on their respective calendars. The agenda is focused on promoting development strategies between China and Brazil.Brazil’s Ag Minister Carlos Fav...
WASDE Soybeans - Nov 2024
WASDE Soybeans – USDA’s latest November estimate for the 2024/25 season is a decrease of 80 million bushels in U.S. soybean ending stocks to 470 million bushels. The U.S. season-average soybean price for 2024/25 is forecast unchanged at $10.80 per bushel. The soybean meal price is unchanged at...
WASDE Corn - Nov 2024
WASDE Corn – USDA’s latest November estimate for the 2024/25 season is a decrease in U.S. corn ending stocks to 1.938 billion bushels. The season-average corn price received by producers is unchanged at $4.10 per bushel. Global coarse grain production for 2024/25 is forecast to be slightly...
WASDE Wheat - Nov 2024
WASDE Wheat – USDA’s latest November estimate for the 2024/25 season is for an increase in U.S. wheat ending stocks by 3 million bushels to 815 million, up 17 percent from last year. U.S. wheat exports are unchanged at 825 million bushels. The season-average farm price is lowered $0.10 per bush...
Mercosur Regional Analysis
Wheat The long-awaited rains have finally arrived in southeastern Buenos Aires, with precipitation totals ranging from 20–50 mm. While the rainfall isn’t sufficient to complete the wheat crop, it provides relief to an area where plants were beginning to suffer. For now, it halts the declin...
Mercosur Regional Analysis: Soybeans
Last week, soybean trading saw a lot of activity, particularly with Brazilian old crop shipments and increased movement in U.S. new crop sales. CNF China trade levels began at 240X for the PNW and 255X for the U.S. Gulf, rising rapidly due to several factors. A drop in Chicago futures triggered...
Black Sea Regional Analysis
Russian Grain Markets: 30 September – 4 October 2024 The first week of September proved bullish in European Russia and slightly bearish in the Asian part and Siberia. The weather factor is important but it’s not the key driver. It may become the decisive factor later on depending on...
Market Commentary: Brazil Rains, Crude Oil Selloff Sink Soy Complex; Cattle Extend Rally on Beef Demand
Trade at the CBOT was mostly lower on Tuesday with the soy complex leading the way south as weather models show more promising rains for South America. Soybeans turned sharply lower on the forecasts and scored a bearish technical day on the chart, with additional selling pressure coming from th...
Market Commentary: Crude Oil Selloff Sinks Soyoil, Soybeans; Corn, Wheat Lower Ahead of Stocks Report
A surprise selloff in crude oil put heavy selling pressure on the CBOT soy complex on Thursday, with soyoil and soybeans scoring bearish reversals for the day. The weakness in the soy complex sent corn and wheat into the red as well, with traders unwilling to take more long risks heading into t...
Market Commentary: Soybeans, Soyoil Extend Rallies; Wheat, Corn Fall as Short-Covering Fades
The CBOT saw diverging trading patterns on Tuesday with soybeans and soyoil continuing their rallies and extending gains to new highs. China is rumored to be purchasing up to 1.2 MMT (44 Mbu or 20 cargoes) of U.S. soybeans for October-November delivery, which put a bid under the market. Too, th...
Mercosur Regional Analysis
Argentina Economic/Policy Update Argentine President Javier Milei, in a public speech this week, presented the 2025 budget that will be sent to Congress for approval. Farmers had high expectations for potential announcements that might improve their business or provide visibility concerni...
Market Commentary: Wheat Retraces; Soyoil Surges
Wheat was the big gainer last week but this week it gave up most of those gains. And soyoil was last week’s biggest loser but it rose to the top this week. Lean hogs also staged a major reversal after losing 1.32 percent last week and then rising 4.1 percent this week. Where there...
Market Commentary: Soy Complex Rises on China Rumors, Brazil Drought; Hogs Extend Rally
Soybeans saw the liveliest action of the major grain/oilseed contracts on Wednesday with a strong, 18-cent overnight rally developing on rumors of Chinese export business. That rally fizzled, however, after the USDA did not report any daily “flash” export sales at 9 AM ET and the ma...
WASDE Soybeans
WASDE SOYBEANS: USDA increased their estimate for global soybean ending stocks by 0.3 million tons to 134.6 million as higher stocks for Argentina and Canada are partly offset by lower stocks for the United States and the EU. U.S. soybean ending stocks are projected at 550 million b...
WASDE Corn
WASDE CORN: USDA’s outlook for 2024/25 U.S. corn is for smaller supplies and a modest decline in ending stocks to 2.1 billion bushels – a reduction of 16 million bushels. World corn ending stocks are projected to be 308.4 million tons, down 1.8 million. The anticipated impact...
Market Commentary: Wheat Rises on Plains Dryness; Corn, Soybeans Sink in Pre-WASDE Trade
Trading at the CBOT was mixed on Tuesday with expectations for the WASDE differing significantly. For corn and soybeans, traders and analysts are all in on the bearish side of things while there is some growing positivity for the wheat markets. That was reflected in Tuesday’s trade with s...
Market Commentary: CBOT Prepares for September WASDE
The CBOT started the week with a mood that was decidedly oriented towards preparing for the September WASDE report. Volume and price action were relatively limited for the day and cattle futures were the surprise bullish leaders. In the grains, corn and soybeans pushed higher with the latter ma...
Market Commentary: CBOT Dips as Short Covering Subsides; Livestock Fall on Macro Worries
The CBOT was mostly lower on Thursday as traders took a day to pause and reassess positions and the grain market outlook with just one day of trade left before the weekend. Too, the September WASDE is looming next week and traders are positioning and adjusting expectations in advance of that re...
Market Commentary: CBOT Rallies Sharply on Bullish Technicals; China-Canada Trade War Looms
The CBOT was nearly uniformly higher following the U.S. Labor Day holiday with wheat, corn, and soybeans all scoring strong gains and meaningful bullish technical developments. There wasn’t a major fundamental catalyst for any of the markets, rather the day’s trade seemed to build u...
Market Commentary: CBOT Rallies on Export Sales, Weather; Wheat Follows Through on Reversal
Thursday and Friday are the last two days of the month with a three-day weekend present to kick off September, which helped create a “risk off” short covering tone in the markets. Consequently, the major CBOT ag markets were all higher for the day with additional fundamental develop...
Market Commentary: Wheat Continues Reversal; Corn Soy Fall on U.S. Weather
The CBOT was mixed on Wednesday with wheat futures following through on Tuesday’s bullish technical reversal after Stats Canada forecast a 34-MMT all-wheat wheat crop, which was below traders’ expectations. That, combined with weather issues for some major wheat growing/exporting co...
Market Commentary: Little to Move the Market But it Moved Anyways
The only real market mover on this last trading day of the week was the Fed’s nod to rate cuts. It is still bearish in grains, and the soy complex continued its small rebound despite the prospect of record production. No doubt because of continued strong demand. It was the second da...
Cotton Market Basics and 2024/25 Outlook
Following recent client requests, WPI provides the following overview of the cotton market, its basic structure and recent trends, and a short outlook for MY 2024/25. Cotton Production World cotton production is highly concentrated with four countries (China, India, Brazil, and the...
Market Commentary: Wheat Hits New Contract Lows; Corn, Soybeans Fall on Record Yields
The CBOT was sharply lower on Thursday with the Canadian rail workers strike and forecasts of record-breaking yields emboldening bears. Wheat futures scored new contract lows amid signs of weaker demand while corn and soybeans saw threats primarily from the ever-expanding production outlook for...
Market Commentary: Corn Dips on Crop Conditions; Cattle Plunge on Lower Beef Values
The big themes from Tuesday’s CBOT trade were that wheat continues to find slow, cautious support amid a weaker U.S. dollar and troubles in Argentina while steady corn and soybean ratings resulted in muted trade for the latter two commodities. Corn futures drifted lower as specs are neith...
Balancing Offense and Defense; Border Measures; Economic Returns from Sport
Balancing Offense and Defense All growers of all crops are not necessarily competitive even in a large agriculture country. Major U.S. row crop growers have asked USTR to ensure that the Americas Partnership for Economic Prosperity (APEP) provide greater market access for their products. By con...
Market Commentary: Soybeans Make New Lows; Corn, Wheat Fall on WASDE Supply Expectations
The CBOT was once again mostly red for the day with traders preparing for the August WASDE and generally expecting large crops and ending stocks for the 2024/25 year. The Midwest weather remains nearly ideal for producing big crops, and the only real question is how harvested acreage will impac...
Market Commentary: Corn, Soy Fall on Weather, Crop Ratings; Wheat Firms on EU Worries
If Monday’s trade as all about the macro market meltdown, then Tuesday’s trade was about returning to normal. Global equity, bond, and currency markets mostly reversed course on Tuesday and pared back some of the massive losses they incurred over the past three trading sessions. Tha...
Market Commentary: Short Covering Caps Bearish Week; Cattle and Macro Meltdowns Continue
The CBOT saw some light short covering in corn, wheat, and soybeans develop after this week’s deeply bearish trade that brought new contract lows in all three commodities. There wasn’t a lot of bullish news, other than the continued hot weather forecast for the U.S. Midwest and conc...
Market Commentary: Corn, Soy Sink on Record Yield Chatter; Wheat Firms on Quality Worries
Corn, the soy complex, and cattle futures each saw extended weakness in Thursday’s CBOT trade with the crop markets coming under pressure from favorable weather conditions and forecasts for the U.S. There is increasing market chatter about record breaking yields for both corn and soybeans...
Market Commentary: Bears Concentrate on Soybeans, Wheat Scores Reversal
The CBOT started the week with a collapse in soybeans and the broader soy complex in early trade that pulled corn and wheat lower as well. Soybeans, soyoil, and wheat all scored new contract lows in the early selloff with funds eagerly extending their short positions. By the day’s end, ho...
Market Commentary: Corn, Soybeans Rise on Weather, Export Sales; Wheat Dips on Yields, Exports
The headline for the CBOT on Thursday was the unexpected surge in soymeal export sales that boosted that market and new crop soybeans to strong gains for the day. Soymeal exports have been a prominent support for the market this year and their recent uptick after December futures fell to near $...
Market Commentary: CBOT Rallies as Funds Cover Shorts, Markets Forge Bottom?
The CBOT was mostly higher for the day with the strength originating from the soybean market and spilling over into corn and soybeans. The soybean market derived its strength from new forecasts of hot, dry weather for the U.S. Midwest as the soybean crop approaches pollination and pod filling...
Summary of Recent Factors Driving Commodity Price Action
Recently, a WPI client asked if we could summarize the major factors that have driven commodity markets over the past several months. The goal is to succinctly describe how markets have ended up in their current state and examine the next major trend(s) that are likely to develop. This report,...
Market Commentary: Corn, Soy Post Half-Hearted Reversals; Hogs Extend Nascent Rally
Tuesday’s CBOT trade featured gains in corn and the soy complex with funds casually covering some of their massive short positions amid oversold technical conditions and following Monday’s damage-inducing storms across the Midwest. Conviction was lacking, however, and the day’...
Market Commentary: Bearishness Envelops CBOT Trade
The CBOT was sharply lower on Monday with markets seeing continued pressure from Friday’s generally bearish WASDE, favorable Midwest weather trends, and gains in the U.S. dollar following the weekend assassination attempt on former President Trump. The assassination attempt obviously does...
Mercosur Regional Analysis
Grains Weather Argentina has faced extreme cold across the country for several days with temperatures well below 0 degrees Celsius for many hours. This extreme weather impacts various crops. For maize still standing in the field, the cold aids in drying and thus speeds up the harves...
Geopolitical Trade Substitution
Historically, Canada has been the fourth largest producer of green peas and the largest exporter of the product. Canada’s global market share for the green pea trade was 37.9 percent in 2022, while Russia supplied 13.7 percent. Meanwhile, China is both the largest producer and importer of...
Market Commentary: Grains Fall as Bears Grab Control
Bears were solidly in control of trade at the CBOT on Monday with mostly favorable U.S. weather forecasts and expectations of a bearish July WASDE report driving price action. Grain and oilseed markets were lower overnight with Matif wheat futures leading the CBOT and KCBT into the red in early...
Market Commentary: Soyoil Leads Soy Complex Higher Again; Cattle Find Pre-Holiday Support
Once again, the excitement at the CBOT was dominated by soyoil, which posted its fifth straight higher close amid rising trade tensions between Indonesia and China. The rally in soyoil – and the broader vegoil complex – helped push soybeans higher and at one point November soybeans...
Market Commentary: Changing Winds for Soybeans, Wheat?
CBOT grain futures initially saw continued impacts from Friday’s surprisingly bearish USDA reports, but those shockwaves seemed to fade throughout the day, which left wheat and soybeans to trade higher. Wheat found support from dryness in the Black Sea and smaller crop estimates for Russi...
Trade Spat Between China and EU
When President Biden announced higher Section 232 tariffs on a list of Chinese goods (see WPI 14 May) anxieties were raised over possible retaliation (see WPI 10 June). Right now, the EU is on the leading edge of the tariff tit-for-tat. Yesterday, China announced its Ministry of Commerce would...
Market Commentary: Crop Progress Data Pressures CBOT; Hogs Collapse on Demand Worries
The CBOT was once again mostly lower with traders shedding position length and getting short as U.S. farmers make solid strides seeding the 2024 crop. There are certainly some areas of concern and potential for some acres to be planted to soybeans at the last minute, but the overall outlook is...
Mercosur Regional Analysis
Wheat Determining how much wheat will be planted in Argentina is difficult. Production margins have gone from very bad to very good, thereby encouraging producers to change their minds about planting intentions. An increase in area is certain; in fact, the top market seed varieties are al...
Livestock Roundup: China Beef Market
China has just banned beef exports from the JBS plant in Greeley, Colorado over ractopamine. A shipment of frozen omasum (the third stomach in a ruminant animal) tested positive in China for ractopamine, which is banned in China. Additionally, a cold storage facility in California, Cool Point O...
Market Commentary: Soyoil Sinks as Cooking Oil Escapes Tariffs; Grains Fall on Crop Progress
The CBOT pushed higher overnight with corn notching a new four-month high and wheat futures extending their rally, but that strength quickly faded during the day session. One of the biggest drivers for the day’s declines was the failure of used cooking oil to be included in the Biden Admi...
Tariffs: UCO No, Phosphate Yes
The Biden Administration just announced higher Section 301 tariffs on a host of imports from China, after the statutory four-year review of those duties imposed by the Trump Administration. The new tariffs did not include the rumored increase for used cooking oil (UCO) that roiled soybean futur...
Mercosur Regional Analysis
Wheat Brazil’s state of Rio Grande do Sul is experiencing the worst climatic catastrophe in the last 80 years, with intense rains causing major floods. There are many dead, injured, and evacuated individuals. Rio Grande do Sul represents approximately 50 percent of the country's wheat pro...
WASDE Soybeans
USDA’s outlook for 2024/25 U.S. soybeans is for higher supplies, increased exports, and higher ending stocks. The soybean crop is projected at 4.45 billion bushels, up 285 million on higher area and trend yield. U.S. ending stocks for 2024/25 are projected at 445 million bushels, up...
WASDE Corn
USDA’s outlook for 2024/25 U.S. corn is for modestly larger supplies, increased exports, and higher ending stocks. The yield projection of 181.0 bushels per acre is based on a weather-adjusted trend. Total corn supplies are forecast at 16.9 billion bushels, the highest since 2017/18. U.S...
WASDE Wheat
USDA’s outlook for 2024/25 U.S. wheat is for larger supplies, increased exports, and higher ending stocks. Supplies are projected to increase six percent from 2023/24. U.S. wheat yield is projected at 48.9 bushels per acre, up 0.3 bushels. 2024/25 ending stocks are eleven percent above la...
Mercosur Regional Analysis
Corn Estimates of Argentina’s corn harvest continue to decrease, mainly due to the impact of Spiroplasma bacteria. The Rosario Grain Exchange lowered its estimate from 57 to 50.5 MMT, while the Buenos Aires Grain Exchange revised their’s from 52 to 49.5 MMT, marking the second conse...
WASDE Soybeans
USDA increased U.S. soybean ending stocks for 2023/24 by 25 million bushels to 340 million. The U.S. season-average soybean price for 2023/24 is forecast at $12.55 per bushel, down 10 cents. Soybean meal and oil prices are unchanged at $380 per short ton and 49 cents per pound, respectively. Gl...
WASDE Corn
USDA increased the U.S. corn use for ethanol and feed – which reduced ending stocks 50 million bushels to 2.1 billion. The season-average farm price is lowered 5 cents to $4.70 per bushel. Global corn ending stocks are estimated to be 318.3 million tons, are down 1.4 million from last mon...
WASDE Wheat
USDA raised U.S. wheat ending stocks for 2023/24 by 25 million bushels to 698 million, 22 percent above last year. The season-average farm price is reduced $0.05 per bushel to $7.10. The 2023/24 global wheat outlook this month is for smaller ending stocks, down 0.6 million metric tons to...
Hogs and Pigs in China
As WPI reported last Thursday, the number of breeding sows on 1 March was 6.016 million head, down 2 percent from year ago levels. Part of that reduction is being offset by continued records in pigs per little, which in the December to February quarter reached 11.53 head. Herd culli...
Market Commentary: Technical Trade Dominates on Quiet Fundamentals
The CBOT was mixed to end the week with scant, fresh fundamental news leading to more technically-oriented trade over the past few weeks. Wheat futures were the downside leader as deteriorating chart conditions and China’s recent cancellations of U.S. SRW export bookings weighed on trader...
Market Commentary: Short Run Bulls Battle Long Run Bears
The CBOT is fighting a battle between improving short run technicals and bearish long run fundamentals, which is apt to keep the market choppy heading into planting season. Technical traders won Monday’s battle in the grains at least, with corn and wheat pushing higher and the latter scor...
WASDE Soybeans
Soybeans: USDA’s March estimate is that U.S. soybean supply and use for 2023/24 is unchanged from February. The U.S. season-average soybean price and the soybean meal price forecasts are unchanged for 2023/24. The soybean oil price is reduced 2 cents to 49 cents per pound. Glo...
WASDE Corn
Corn: USDA’s March estimate is that 2023/24 U.S. corn outlook is unchanged from February. The season-average corn price received by producers is lowered to $4.75 per bushel based on observed prices to date. Global corn ending stocks are down 2.4 million to 319.6 million tons...
WASDE Wheat
Wheat: USDA’s March estimate is that U.S. ending stocks are increased 673 million bushels and are 18 percent higher than last year. The season-average U.S. farm price is reduced $0.05 per bushel to $7.15. The global wheat ending stocks are lowered 0.6 million tons to 258.8 million,...
Market Commentary: Interesting Trade Despite Few WASDE Changes
The CBOT posted interesting developments on Friday, even while the March WASDE report failed to offer the same intrigue. The USDA’s latest look at U.S. and world supply and demand fundamentals was largely a “steady as she goes” affair with few significant changes. Despite the...
Black Sea Regional Analysis
Russian Grain Markets: 26 February–1 March 2024 Russian grain markets remained bearish following the global trend exports are the key driver. For several weeks in a row, Russian pea prices have climbed higher and higher and as long as there is no export duty for peas, this commodity will...
Market Commentary: Wheat Rallies on Hail in India; Corn, Soy Turn Higher on Technical Buying
The CBOT was mostly higher to start the week with unexpected hail and rain damage to India’s wheat crop lifting world wheat markets while corn and soybeans followed through on last week’s supportive technical trade. Funds were net buyers across the CBOT for the day despite holding a...
Mercosur Regional Analysis
Wheat Wheat is going through a challenging time in Argentina. The decline in prices, both in the local and export markets, has been constant over the last few months and has pushed values to levels that are very difficult for producers to absorb. Currently, in the local market, transactions are...
Market Commentary: Consolidation Continues as CBOT Contemplates Record Fund Short Position
Tuesday’s mood at the CBOT seemed to be one primarily of consolidation and mild short covering. Corn futures extended Monday’s key reversal but failed to make much upside progress while the soybean market settled lower after posting 16-cent gains in early trade. Wheat futures pushed...
Mercosur Regional Analysis
Soybeans Market Overview Following the Chinese Lunar New Year holiday, expectations for increased soybean demand from China were not met, resulting in a lower-than-anticipated purchase volume. There was still some activity, however, and last week Brazil saw movement for March...
More China Pork
As noted yesterday, China’s pork imports appear to have recently turned higher despite supposedly over-abundant and under-valued domestic supplies. In an article about the over-supply of pork in the U.S. market, the Wall Street Journal cited declining sales to China during the first 11 mo...
China’s Pork Dilemma
When African Swine Fever (ASW) struck China late last decade, animals were euthanized and actual swine numbers fell from their high by nearly 38 percent. Meanwhile, pork imports understandably rose dramatically to fill the void and consumer demand. Imports fell as the domestic herd recovered. D...
WASDE Soybeans
USDA’s February estimate is for U.S. soybean ending stocks to increase by 35 million bushels to 315 million bushels. The U.S. season-average soybean price for 2023/24 is forecast at $12.65 per bushel, down $0.10 from last month. The soybean meal price is forecast unchanged at $380 per sho...
WASDE Corn
USDA’s February estimate for U.S. corn ending stocks is increased 10 million bushels to 2.172 billion bushels. Corn used for glucose and dextrose is reduced 10 million bushels based on indicated usage to date. With no other use changes, the season-average corn price received by producers...
WASDE Wheat
USDA’s February estimate is for a slight increase in U.S. wheat ending stocks by 10 million bushels to 658 million for 2023/24. That is because food use is reduced 10 million bushels to 960 million, on lower wheat flour grinding - as indicated in the NASS Flour Milling Products report rel...
Market Commentary: A Day of New Numbers
It might have been a day of big surprises given the number of new crop estimates being issued around the world. Governments in China, Brazil, Canada, and the U.S. all issued new forecasts, but the overall changes were relatively small. The result was a mixed day in U.S. futures markets. Volume...
Black Sea Regional Analysis
Russian Grain Markets: 29 January–2 February 2024 The market was bearish following global trends and huge stocks will continue putting pressure on the market. It is hard to figure out why the government would further increase export duties seeing that the global trend is bearish and expor...
Market Commentary: Corn Falls on Early Selling; Wheat Continues Sideways March; Cattle Extend Rally
The CBOT ag markets spent most of Tuesday preparing for the coming February WASDE report with funds and commercials adjusting positions. Wheat futures saw mild strength amid their relentless grid sideways while the soy complex found some upside traction in follow-through trade from Monday&rsquo...
Market Commentary: China Economic Worries Shake Grain Markets, Soybeans End Below $12, Corn at $4.40
The CBOT was mostly lower to start the week with commodity and macroeconomic markets under pressure from bearish economic news in China. Over the weekend, a court ordered China’s largest real estate developer, Evergrande, to liquidate amid the ongoing bankruptcy. That sent bearish ripples...
Market Commentary: China Approval of Argentine Wheat Snaps Futures’ Winning Streak; Livestock Rally Accelerates
Grain/oilseed and livestock markets are currently headed in diverging directions – with commodities involving plants and tractors falling while commodities eating said plants rallying sharply. Soybeans were the downside leader at the CBOT after the Buenos Aires Grain Exchange said the Arg...
Market Commentary: Wheat Rallies on China Buying Rumors, Spring Acres Estimates; Hogs Extend Gains
The CBOT was mostly higher at midweek with grains – particularly wheat – leading the rally. Market chatter suggests China has returned to the U.S. to book SRW wheat, though we cannot find confirmation of such trades yet. Even so, the words “China buying” will create a ra...
Market Commentary: CBOT Higher on Short Covering, Bull Spreading; Hogs Post Technical Rally
The CBOT finished higher for the day with traders increasingly engaging in bottom-picking and hopeful that last week saw the grain market develop its near-term and seasonal lows. Grain and oilseed markets started the day session with noted strength, but only soybeans, soymeal, and KC wheat coul...
Market Commentary: Dead Cat Still Bouncing
Thursday saw the start of a “dead cat bounce” for many oversold CBOT futures contracts, and that trend continued Friday. Corn and wheat futures finished higher for the day but posted the gains on unconvincing volume and with little in the way of meaningful technical developments. Th...
China Pork and Beans
China’s National Bureau of Statistics reports that pork production increased 4.6 percent in 2023 to 57.94 MMT. This makes the fourth consecutive year of production increases since the trough of 2019 at the height of the African Swine Fever outbreak. Over 80 percent of soybeans in China ar...
WASDE Soybeans
USDA reduced the 2023/24 season-average U.S. soybean price by 15 cents to $12.75 per bushel. The soybean meal price is projected at $380 per short ton, down 10 dollars. The soybean oil price is forecast at 54 cents per pound, down 3 cents. Global soybean production is raised 0.1 million tons to...
WASDE Corn
USDA reduced the 2023/24 season-average U.S. farm price of corn by 5 cents to $4.80 per bushel. Corn production is estimated at a record 15.3 billion bushels. U.S. corn stocks are up 31 million bushels. Foreign corn production is forecast higher with increases for China, India, and Paraguay par...
WASDE Wheat
USDA reduced the 2023/24 season-average U.S. farm price of wheat by $0.10 lower to $7.20 per bushel. The global wheat outlook for 2023/24 is for larger ending stocks compared with last month. Global supplies are raised 3.6 million tons to 1,056.5 million. Increased stocks for Russia, Ukraine, a...
Bread Baskets
Import dependence for food rankles most politicians since they have persistently fed a nationalistic feedback loop on the issue to their constituents. No one is demanding that their television sets be manufactured locally, but food is national security and others can’t be trusted. This is...
Black Sea Regional Analysis
Russian Grain Markets: 1–5 January 2024 Most of Russia’s regions have been celebrating the New Year holidays and the the Russian Orthodox Christmas resulting in a slowdown of grain shipping in the Black Sea. Previously signed contracts are being fulfilled and most likely there will...
Mercosur Regional Analysis
Policy and Macroeconomic Update There is discomfort among farmers in the Argentine countryside. The newly inaugurated Milei administration promised during its campaign measures that would favor producers, but for the moment is not fully keeping its word. Although the changes to the exchange rat...
Russian Agriculture Enigma; Imbalanced Analysis
Russian Agriculture Enigma Among the many elections this year is Russia’s during 15-17 March. Vladimir Putin will be overwhelmingly elected. He has been effectively in control of the country for 23 years. Andrei Kolesnikov at the Carnegie Endowment for International Peace says that Russia...
Livestock Roundup: Hog and Pork Restructing in China
China is in its holiday season; first was the Winter Solstice, the shortest day of the year, on 22 December. Next is the Lunar New Year which begins on 10 February. Both traditionally mark seasonal demand for pork. We know that last year, after extended COVID lockdowns through 2022, the 2023 Lu...
Black Sea Regional Analysis
Russian Grain Markets: 11–15 December 2023 Russian agriculture has had a difficult year with global sanctions in place creating problems with inputs like seeds, fertilizers, chemicals, spare parts, and western equipment. In an effort to help, the government provided subsidies to farmers a...
Market Commentary: Corn, Soy Complex Slide Sideways; Wheat, Cattle Extend Rallies
Trade at the CBOT was mostly a low-volume affair heading into the weekend and there was a growing sense that, except for wheat and cattle, most of the week’s activity had already been completed. The soy complex was mixed as soybeans and soymeal were mostly lower while soyoil rallied on te...
Black Sea Regional Analysis
Russian Grain Markets: 4–8 December 2023 As of 8 December, the Russian government reports the wheat crop at 95 MMT in bunker weight versus 105.6 MMT a year ago. The information from the Ministry is delayed and is usually adjusted several times. Wheat was reportedly harvested from 29.1 Mha...
Market Commentary: Crude Oil Pulls Soy Complex Lower; Wheat Rises on Growing Demand
The CBOT was mixed on Tuesday with the three legs of the soy crush all trading lower amid technical selling and a steep selloff in crude oil values. In contrast, the wheat market managed to shrug off Monday’s dramatic declines and push higher with signs that world demand is starting to in...
Mercosur Regional Analysis
Argentina’s Policy and Macroeconomic Situation Argentina’s trading last week was shortened due to a national holiday on Friday. At the same time, it was the week before the newly elected President took office on Sunday, and expectations of a dramatically different approach to...
Livestock Roundup: China Hog and Pork Situation
CME cattle futures have grabbed the attention in the U.S., but in China, hog futures are the focus. January hog futures on the Dalian exchange are at a new contract low of ¥14.07/kg which is down about 4 percent. March futures are down about 3 percent with higher volume and a 10 percent dec...
Market Commentary: Brazil Rains, Profit Taking Push CBOT Lower; Cattle Find New Contract Lows
The CBOT turned red for the day with the rallies in wheat and corn fading with the December WASDE looming on Friday. USDA reported fresh SRW wheat export sales to China, which boosted wheat futures initially, but there was a subsequent sense of reluctance to exit profitable short positions ahea...
Market Commentary: Second Day of SRW Sales to China Boosts Wheat; Pre-WASDE Consolidation Begins
Trends at the CBOT continue to diverge with wheat futures rallying sharply on fresh Chinese interest in U.S. SRW wheat. The wheat market has been the upside leader for the past several sessions as a combination of growing bullish fundamentals and aggressive fund short covering lift the market...
Market Commentary: Rains Send Soy Complex Lower; China Sales, Short Covering Extend Wheat Rally
Rains in Brazil and Argentina heavily influenced the CBOT to start the week and sent the entire soy complex sharply lower. The precipitation also weighed on corn futures, which settled essentially unchanged, but was offset by the continuing rally in wheat futures. Wheat was again sharply higher...
Mercosur Regional Analysis
Wheat Argentina’s wheat harvest keeps moving at high speed and advanced 10 percent last week, which put the total harvest above 35 percent of the area. Most fields are being harvested 7-10 days earlier than usual, which is why at this point last year the harvest was only 20 percent comple...
Market Commentary: Exports versus Weather and Crude Oil
It was a mixed day for futures trading with corn and wheat rebounding from early week contract lows but the soy complex sliding lower on a weak petroleum market that dragged soyoil down with it. Weather added a bearish overlay as rains continue to be helpful for Argentina and the forecas...
Black Sea Regional Analysis
Russian Grain Markets: 20–24 November 2023 Russian markets remained quite volatile, however, the Asian area finally stabilized because Kazakhstan seems to have replenished their stocks for the moment. The Siberian market is stable and although prices for 3rd grade milling wheat are...
Suppliers Look at China
China has just over 18 percent of the world’s population, but its food imports and consumption share of world food supplies varies greatly. Soybeans are a well-known story. The Middle Kingdom consumes 30 percent of the world’s soybeans and, to its chagrin, it imports 62 percent of t...
European Market Analysis
Regional News Russia has shipped two vessels of wheat to Somalia and Burkina Faso as part of the country’s promise to send free grain to Africa. China purchased 66 KMT of feed corn from Ukraine at $248/MT C&F for December shipment. Through 24 November, Ukraine has ex...
De-Risking and Food
The Biden Administration went through a rapid succession of descriptors for its trade policy toward China before settling on de-risking. It initially called for decoupling but switched to re-shoring. This upset allies and so next it tried friend-shoring. It has stuck with de-risking for a while...
Market Commentary: Good Exports but Brazilian Wildcard
The market was in the red across the board at the open and mostly stayed that way. The exceptions being corn and lean hogs. They broke to the upside late morning and while lean hogs wobbled, both were in the green at the close. Despite the downbeat of the past two sessions, corn and the s...
Market Commentary: China Buying and Soymeal Demand Sends Soy Complex, Corn Higher
The CBOT was mostly higher to start the week with sharp rallies in soymeal and soybeans creating spillover buying for the rest of the grain markets. Funds were active buyers in both markets with strong spot demand for soymeal driving that market’s rally while soybeans rallied on Chinese b...
Over-greening Bees; China versus Labor; Farm Policy
Over-greening Bees In 2018 we were all warned that a third or more of our food supply was being threatened by the struggles facing bees. Europe focused on insect pollinator health, including banning (with exceptions of course) neonicotinoid pesticides as a threat to pollinators. American resear...
What Could the Biden Xi Meeting Yield?
U.S. President Biden and Chinese President Xi will meet in San Francisco on Wednesday to discuss key geopolitical issues and “managed trade.” The geopolitical discussion will focus on the latest developments with North Korea, and, additionally, issues that have potential impacts on...
WASDE Soybeans
Soybeans: USDA’s outlook for 2023/24 is higher U.S. ending stocks, up 25 million on higher yields, to 245 million bushels. The U.S. season-average soybean price for 2023/24 is forecast at $12.90 per bushel, unchanged from last month. The soybean oil price was reduced 2.0 cents to 61.0 cen...
WASDE Corn
Corn: USDA’s outlook for 2023/24 is higher U.S. ending stocks by 45 million bushels to 2.2 billion. The season-average corn price received by producers is lowered 10 cents to $4.85 per bushel. This month’s 2023/24 global corn ending stocks, at 315.0 million tons, are up 2.6 million...
WASDE Wheat
Wheat: USDA’s outlook for 2023/24 is for higher U.S. ending stocks by 14 million bushels to 684 million. The projected 2023/24 season-average U.S. farm price is lowered $0.10 per bushel to $7.20. The global wheat outlook for 2023/24 is for larger ending stocks, raised 0.6 million, to tons...
Market Commentary: CBOT Rallies Sharply Ahead of November WASDE
The November WASDE usually isn’t a major market-moving event, but you wouldn’t know that from how CBOT futures reacted just one day before the report. Wheat – the bearish laggard of the grain complex – jumped to 20+ cent gains at mid-week with little apparent reasoning...
Black Sea Regional Analysis
Russian Grain Markets 23–27 October 2023 As of 27 October, winter crops were planted over 18.5 Mha versus the 20 Mha planned by the government. If Russia reaches this number, it will be up 1.5 Mha from last year. This also includes occupied territories of Ukraine, according to the g...
China’s Wheat Demand Trend
Mercosur Regional Analysis
Wheat After Argentina’s recent presidential election and in anticipation of the runoff election, the current government extended the possibility for all exports of goods and services to access 30 percent of the foreign currency at a higher exchange rate. This move was made to keep financi...
Market Commentary: New Highs in Soymeal; Cattle Finally Turnaround; China Washes Out Brazilian Soy Cargoes
The CBOT largely followed its existing trends into the weekend, which meant rallies in soymeal and soybeans, new contract lows in wheat, and sideways trade in corn and soyoil. Live cattle futures finally posted what WPI views as an overdue correction from Monday’s collapse with steady/fir...
Market Commentary: Soymeal Flashes Reversal; South American Rains Douse Corn, Soybeans
The CBOT was heavily influenced by fresh forecasts for beneficial rains in South America over the next two weeks. Rains will offer relief to drought-afflicted Argentina and keep Brazil’s soybean planting (roughly one-third finished so far) moving forward. Moreover, the shift toward a wett...
Farm Bill Schedule; Digital Protectionism
Farm Bill Schedule Congressman Mike Johnson (R-Louisiana) appears poised to capture the position of House Speaker. If successful, he will prove the axiom that it is not the best candidate that wins a position, but rather the least disliked. He also heard and responded to complaints from the Hou...
Black Sea Regional Analysis
Russian Grain Markets: 16–20 October 2023 As of 20 October, Russian farmers harvested grains and pulses from 44.6 Mha which is in line with last year (44.5 Mha), averaging 3.08 MT/ha versus 3.33 MT/ha, a record-breaking year in Russian history. Interestingly, Russia first reports th...
Beyond Fundamentals
The Brazilian share of China’s corn imports over the past three months has been nothing short of impressive. It can be argued that U.S. corn should have been more competitive given that its ending stocks are nearly seven times larger but that was not reflected in pricing. Besides,...
Market Commentary: CBOT Fails to Maintain Technical Strength; COF Report Sinks Cattle Futures
Last week’s trade saw major ag commodities rally on bullish technical developments with corn, soybeans, and soymeal all topping key chart points. That strength did not last, however, as the CBOT turned lower in what was a weak day across most markets. The situation in the Middle East cont...
Elbow for an Eye; Eye for an Eye
Elbow for an Eye Legislation aimed at China has been introduced in the U.S. Congress to restrict foreign ownership of farmland. However, it is more nimble state legislators who are increasing restrictions on China in their jurisdictions. Arkansas has just ordered Syngenta to sell 160 acres of f...
Market Commentary: Export News and Rumors Create Mid-Week Strength
Strength developed at the CBOT on Wednesday with another strong rally in soymeal helping pull soybeans higher and, in turn, support the corn market as well. Fresh news is a bit lacking right now, so export news and rumors of possible sales have an outsized influence on the market. Soybeans cont...
Market Commentary: Soy Complex Rallies on NOPA Report; Exports Improve as Barge Rates Fall
The soy complex was the upside leader at the CBOT to start the week with a bullish NOPA report driving the markets. NOPA reported a record-large September crush and soyoil stocks at nine-year lows, which sent soybeans and soyoil futures higher for the day. Beyond that, grain and livestock marke...
Mercosur Regional Analysis
Sorghum Little has been said about the sorghum crop in Argentina, but it is having a very particular year. The 2023 crop produced 2.5 MMT according to the Buenos Aires Grain Exchange on 845,000 hectares of harvested land. This is far below the nearly-3.5 MMT harvested in 2020/21 and 2021/...
China Hoovering Up Wheat
China made a rare purchase of U.S. wheat and is on track to make record overall purchases this year. Domestic consumption of wheat has been growing at a 2.6 percent annual rate at the same time domestic production is increasing by 0.66 percent. Exacerbating the situation this year is excessive...
WASDE Soybeans
USDA kept their estimate unchanged at 220 million bushels for U.S. soybean ending stocks. The estimate for U.S. production was reduced 42 million on lower yields, but beginning stocks were increased and soybean exports reduced 35 million bushels to 1.76 billion (due to increased competition fro...
WASDE Corn
USDA reduced their estimate for U.S. corn ending stocks by 110 million bushels to 2,111 million bushels for 2023/24. This is still a healthy ending stocks, but the estimated season-average corn price received by U.S. farmers was raised 5 cents to $4.95 per bushel. Global corn stocks are down 1...
WASDE Wheat
USDA increased U.S. wheat ending stocks by 55 million bushels to 670 million, up 15 percent from last year. The season-average farm price is reduced $0.20 per bushel to $7.30 on higher projected stocks for the remainder of the marketing year. The global wheat outlook for 2023/24 is for lower st...
China’s Food Autarky
Zhang Hongzhou at Nanyang Technical University in Singapore says that geopolitical tensions, war, and climate change have refocused China on food self-sufficiency. Not that it had lost importance, but it is now receiving greater attention. He quotes Chinese President Xi Jinping stating, "Histor...
Market Commentary: Corn and Livestock Bulls Revived; Wheat, Soy Struggle Under Bearish Pall
Grains and livestock markets traded opposite directions to end the week with non-meat products ending lower amid profit taking and pre-WASDE position adjustment while livestock futures rallied across the board. One might have expected grain futures to post gains to end the week, given the week&...
Market Commentary: Wheat Firms Again as China Buys SRW; Cattle Crash Through Support
The CBOT was mixed on Tuesday with wheat following through on Monday’s sharp rally after USDA announced 220 KMT of SRW sold to China for 2023/24. That, combined with growing commercial demand for HRW wheat and stronger Paris milling wheat futures helped wheat futures rally for the day. Co...
Mercosur Regional Analysis
Weather Outlook The arrival of the expected "El Niño" weather event for Argentina continues to be delayed, and the situation is becoming more complex every day. There is a very large area that includes the western part of Buenos Aires, the eastern part of La Pampa, the provinces of...
Market Commentary: Reports Tank Soy Complex and Wheat; Corn Stocks Bullish but Market Falls Anyway
The much-anticipated Grain Stocks report failed to match expectations in terms of supply data, but more than exceeded hopes for an exciting day of trade. The USDA’s headline report – the Grain Stocks as of 1 September – and the Small Grains summary report sent wheat and the so...
Responding to China
EU Trade Minister Valdis Dombrovskis is headed to China, reportedly with the message to sign onto some form of trade agreement giving Europe assurances of a more balanced relationship, or risk things getting worse. It doesn’t help when Beijing’s rhetoric is over-wrought. The EU has...
Chinese Energy Imports: Crude Oil at Record Levels
There has been much attention to, and discussion of, China’s declining two-way trade volumes. China is a trade dependent economy, with imports of many commodities and goods fueling its manufacturing and processing sectors and exports bringing in hard currency. China’s trade flows, h...
Mercosur Regional Analysis
Wheat Despite recent rains and improvements in the wheat crop’s overall state, the Rosario Grain Exchange has reduced its production estimate by 600,000 MT, which now stands at a total production of 15 MMT. This is because the area from the center of the Cordoba Province northward and wes...
Black Sea Regional Analysis
Russian Grain Markets: 4–8 September 2023 Russian grain markets remained bearish, however, export volumes of all agricultural commodities from Russia remained stable. Russia has no navigation restrictions across the Black Sea. Going through Bosporus or any other channel, Russia can...
WASDE Soybeans
USDA reduced U.S. soybean stocks for 2023/24 to 220 million bushels, down 25 million from last month. Global soybean ending stocks are reduced 0.2 million tons to 119.2 million. The season-average soybean price is forecast at $12.90 per bushel, up $0.20 from last month. The soybean meal p...
WASDE Corn
USDA made slight increases in U.S. corn for 2023/24 - U.S. corn outlook is for slightly larger supplies and use unchanged. The result is ending stocks are up 19 million bushels to 2.2 billion. The season-average corn price received by farmers is unchanged at $4.90 per bushel. Foreig...
WASDE Wheat
USDA made no changes in total U.S. wheat for 2023/24. Global supplies are projected to decline 7.2 million tons to 1,054.5 million, primarily on lower production for Australia, Canada, Argentina, and the EU, which is only partly offset by an increase for Ukraine. World ending stocks are r...
Brazil and China Dominate Beef Market
A drop in U.S. beef exports is corresponding with the cattle cycle fall in production. U.S. beef production is falling by a half million tons, with domestic consumption losing about half that amount, and reduced exports offsetting about a third of the lower output. The export drop looks more si...
Market Commentary: Futures Unfazed by Heat but Barge Rates Soar; Crush Report Shows Soyoil Demand
The CBOT was mostly flat in quiet trade to end the week with traders showing little concern for a weekend of hot, dry weather for most of the crop-growing U.S. Corn and soybeans managed to find their way to modest gains on short covering and some reaction to the weather, but wheat futures ended...
Market Commentary: Sliding into Fall
It was another day of the weather and Chicago working at cross purposes. Continued heat and dryness are expected to knock corn and soybean yields lower but it was another day of losses for grains and oilseeds. There may be some profit taking ahead of the upcoming three-day holiday weekend, but...
Market Commentary: Lots of Mixed Messages
You are reading this report to better understand the issue of risk. This might make you unusual since the Global Financial Literacy Excellence Center reports that respondents to its surveys show only 35 percent answer questions correctly about the topic. Then again, it is a tricky subject. Even...
More BRICS, Same Problems
The BRICS Group, a club of nations with the goal of tilting the international order away from the West, has invited six countries to join and make it an unhappy family of eleven. We previously noted the shortcomings of the original BRICS and the new cousins have similar genetic defects: A...
BRICS Domination
The BRICS countries (Brazil, Russia, India, China, South Africa) meeting in South Africa are being noted for contributing a higher share (31.5 percent) to global GDP than the G7 (30.7 percent). They also comprise 26.7 percent of the world's land surface and 41.5 percent of the global population...
China Flips on Food
Washington goes paranoid over import dependence on microchips and EV’s, but not food despite a recent trade deficit in grub. Nations that have experienced starvation in the past, such as those in Europe and China tend to focus on food self-sufficiency. Until recently, the mantra from Beij...
Feast or Famine
The COVID supply chain meltdown created anxiety over the availability of agricultural inputs. This compelled many operators to look forward and lock in their needs for 2023, often at elevated prices. This buy-high insurance marker has been met with ammonia prices that have now fallen by 50 perc...
Mercosur Regional Analysis
Macroeconomics After Argentina’s elections and currency devaluation, it experienced another week filled with rumors and uncertainty. Financial and parallel exchange rates adjusted automatically, causing the gap against the official rate to exceed 100 percent, which was worse than before t...
Market Commentary: Midwest and CBOT Heat Up; Hog Rally Eases Discount; Cattle Supplies Tighten
The CBOT was almost uniformly higher to end the week as crop markets are increasingly concerned about the coming two-week weather forecast. The next week will be extremely hot and dry for the Midwest and corn and soybean yields are likely to take a hit. Just how hard-hit they will be remains th...
Market Commentary: CBOT Breaks Support on Crop Ratings, China Data; World Water Worries
The CBOT was sharply lower for the day with wheat, corn, and soybeans all breaking major technical support points. Yesterday’s better-than-expected Crop Conditions report from USDA added pressure overnight, despite the two-week forecast for very hot temperatures and dry conditions for the...
Trade Deficit Focus; Measuring Up China
WASDE Soybeans
USDA reduced their estimate for U.S. soybean ending stocks to 245 million bushels, down 55 million from last month. The first survey-based soybean yield forecast of 50.9 bushels per acre is reduced 1.1 bushels from last month. The U.S. season-average soybean price for 2023/24 is forecast...
WASDE Corn
USDA increased their estimate for 2023/24 U.S. corn outlook beginning stocks by 55 million bushels. However, the estimate for total supply declined more than use and that caused ending stocks to decline by 60 million bushels to 2.2 billion. The season-average corn price received by producers is...
WASDE Wheat
USDA reduced their estimate for U.S. wheat production to 1,734 million bushels, down 5 million from last month as lower Other Spring and White wheat production is partially offset by increases for Hard Red Winter (HRW), Soft Red Winter, and Durum. The all-wheat yield is 45.8 bushels per acre, d...
China In-Country Analysis
Macroeconomics Food Costs See Sharp Drop in July After a Sizable Uptick in June Food prices have whipsawed this summer after seeing a steady climb in Q2. After a 1 percent uptick in May, the average cost of food moved up 2.3 percent in June from the year prior. While pork prices fell by 7.2 per...
Market Commentary: Calm before the Calm
Early pattern recognition on the CBOT today ahead of tomorrow’s August WASDE report - bottom line no drama. Volume was slack, except in lean hogs, and trading ranges were muted. December corn had a trading range of 4.75 cents, which is to say it is settled science. Except for Monday, over...
Market Commentary: U.S. Weather Shifts Again; WASDE Expectations; Ethanol Margins Climb
The CBOT was mixed at midweek with pre-WASDE positioning once again driving much of the day’s activity. Corn attempted to rally on short covering and continued strength in Dalian futures, but rallies were again capped above $5 by selling pressure. Soybeans and soyoil managed to squeeze ou...
Market Commentary: Shorts Grow Cautious Ahead of WASDE
The CBOT posted a mixed day in light volume trade with preparations for the August WASDE that will come out this Friday driving much of the market action. Corn and the soy complex finished mostly higher while wheat was mixed as traders seem cautious against becoming overly short the market. Tra...
Big Picture Trade Snapshot
U.S agricultural exports through May (the June data will be released on Thursday) show that among the 213 categories tracked for agriculture, exports are down year-to-date from last year by 8.5 percent in value, while imports are down 0.3 percent. Overall, that is a 4.4 percent drop in two-way...
Mercosur Regional Analysis
Corn In addition to implementing a differential exchange rate for corn, exporters were granted a 240-day extension to fulfill export permits that had shipment dates between 24 July and 30 September and the exportable surplus was increased to 26 MMT. With this extension, the government eases pre...
Market Commentary: Attacks on Russian Ports Lift Grains; Feeder Cattle Hit All Time Highs
In a twist on the recent Black Sea narratives, CBOT futures were higher overnight after Ukraine attacked Russian port infrastructure in the Crimean Peninsula. Reports came overnight that Russia’s oil export infrastructure in the Novorossiysk port had been attacked by naval drones (presume...
Market Commentary: No Gapping Day
When the close is not too far off the open, the trading range is small and the volume is light, the price must be right. Markets continued their quotidian march generally lower but in a modest way. This no doubt reflects a weather forecast that spells recovery from an otherwise dis...
Market Commentary: CBOT Sheds Weather Premium on Forecasts of Midwest Rains
Weekend weather model runs continued to show beneficial rains for the Midwest and Plains over the next two weeks with more moderate temperatures. The forecast comes just as the corn crop finishes pollinating and enters peak kernel fill while the soybean crop will enter its key yield-defining pe...
Threats to China Soybean Demand
Hovering over the issue of soybean demand is China’s reported slowing GDP growth. Second quarter growth was reported at 6.3 percent, far better than the 1.1 percent U.S. growth. Though China’s growth in real terms versus year-on-year was an annualized 3.2 percent. Critics will even...
WASDE Soybeans
Soybeans: USDA reduced their July estimate for 2023/24 U.S. ending stocks to 300 million bushels, 50 million lower than last month. The U.S. season-average soybean price for 2023/24 is forecast at $12.40 per bushel, up $0.30 from last month. The soybean meal price is projected at $375.00...
WASDE Corn
Corn: USDA increased their July estimate for 2023/24 U.S. ending stocks to 2,262 million bushels. The season-average farm price received by producers is unchanged at $4.80 per bushel. Foreign corn ending stocks are virtually unchanged relative to last month. Global corn stocks are up 0.1...
WASDE Wheat
Wheat: USDA increased their July estimate for 2023/24 U.S. ending stocks to 592 million bushels, 30 million higher than last month. Winter wheat production is forecast to be higher on larger harvested area and increased yields. The projected season-average farm price is forecast at $7.50 per bu...
Market Commentary: Pre-WASDE Short Covering Lifts Corn, Soybeans; Wheat Lower on Weak Demand
The CBOT was mixed to start the week with all eyes now solidly focused on Wednesday’s WASDE report. Corn and soybeans strengthened in early trade due to weekend rains that missed the western Corn Belt and northern Plains as well as short covering heading into the WASDE report. Wheat futur...
Mercosur Regional Analysis
Wheat This week Argentina saw low intensity rains, but they again fell on areas that at this moment do not have any need of the moisture. On the other hand, the western portion of the agricultural area and a large part of the nucleus region continue to suffer with no rain. Many farmers have alr...
Atypical BSE and the WOAH; What Will China Do?
The World Organization for Animal Health (WOAH) announced last month that it has removed atypical bovine spongiform encephalopathy (BSE) from the list of animal diseases that require compulsory notification. As WPI covered in May, A 5-year-old cow in South Carolina was discovered to...
Black Sea Regional Analysis
Russian Grain Markets: 26–30 June 2023 Russian Grain Union is estimating the Russian grain crop at 130-140 MMT and export potential at 55 MMT. The Union is not expecting a record crop again and is estimating a 10 percent decline. A pessimistic scenario discussed by some domestic ana...
Mercosur Regional Analysis
Wheat Argentina’s wheat sowing is progressing at a good pace thanks to favourable weather conditions, and with a weekly progress of almost 14 percent, 71 percent of the expected area has been sown. There are still areas with virtually no moisture reserves (see map below with the areas of...
Market Commentary: EPA Volumes Sink Soyoil; Grains Rally on Crop Conditions
Just one day after this analyst wrote that grain futures were likely to take a break from their rally amid overbought technical conditions, futures extended their rallies based on worsening U.S. crop conditions. The USDA’s crop conditions data yesterday was bullish corn, soybeans, and spr...
China In-Country Analysis
We regret to inform subscribers that WPI's analyst in China is currently ill and thus there is no report this week. ...
Market Commentary: Lack of Rain Driving Out Shorts
Note: WPI chief market analyst Matt Herrington is away on travel until 20 June. Agricultural commodity futures continue to be driven by the El Nino advisory and its associated weather. While some parts of the Corn Belt received some moisture this past weekend, too many areas were missed...
WASDE Soybeans
USDA’s projection for U.S. soybeans is for 2023/24 ending stocks of 350 million bushels, up 15 million from 2022/23. Global 2023/24 ending stocks are increased 0.8 million tons to 123.3 million with higher stocks for the United States, Brazil, and the EU being partly offset by lower stock...
WASDE Corn
USDA’s projection for U.S. corn is for increases to both beginning and ending stocks: U.S. exports are lowered 50 million bushels and ending stocks are raised 35 million bushels to 2,257 - this is well above the 2022/23 ending stocks of 1,452 million bushel. The season-average farm price...
WASDE Wheat
USDA’s projection for U.S wheat in the current 2023/24 season is total U.S. wheat production of 1,665 million bushels. This is a production level that is similar to the prior 2022/23 season's production of 1,650 and similar to the 2021/22 level of 1,646 million bushels. U.S. ending...
China In-Country Analysis
Macroeconomics Food Inflation Soars to 1 Percent in May After seeing food prices rise by just .4 percent in April, May saw a sharp rebound driven by the cost of cooking oils, fresh fruit, and milk. May also marked the fourteenth consecutive month that the cost of food has risen year-on-year. Th...
Total versus Change in Pork Consumption
China is by far the world’s largest consumer of pork, eating over half the world’s supply. This also drives feed demand and this grain supply destruction. However, its per capita consumption is lower than many other large pork producing countries. Brazil and the Philippines are the largest cons...
Market Commentary: Some Bouncing Off the Week’s Lows
Except for soyoil and SRW, the market provided a rebound today for the agricultural commodity markets. Most contracts reflected their overnight closes. Key points for today and the week include the following: New contract lows were printed this week in soybeans, soyoil, SRW, and HRS. Only...
Sino-Ag Developments
EconomyLeaders gather this month for the annual Central Economic Work Conference with the view of another sub-par year ahead and the need for bold action to turn the economy around. Recent measures have included lowering the cash reserve requirements at banks so that more money is available for...
Sino-Ag Update
EconomyDeflation continues to be a problem with the Producer Price Index declining in November for the 26th month in a row. Consumer inflation was expected to increase 0.5 percent after rising 0.3 percent in October, but instead it rose by just 0.2 percent, a five-month low. Despite economic so...
Wasde Soybeans
WASDE Soybeans: 2024/25 U.S. soybean supply and use projections are unchanged. There was a significant increase in soybean oil exports by 500 million pounds to 1.1 billion. However, that increase was partly offset by reduction in food, feed, and other industrial use of soybean oil by 200 millio...
Wasde Corn
WASDE Corn: 2024/25 U.S. corn use for ethanol production is increased by 50 million bushels to 5.5 billion. U.S. corn exports are raised 150 million bushels to 2.5 billion. The result is that corn ending stocks are reduced by 200 million bushels to 1.7 billion. The season-average corn price rec...
Wasde Wheat
WASDE Wheat: 2024/25 U.S. wheat exports are raised 25 million bushels to 850 million bushels. U.S. wheat ending stocks are reduced by 20 million bushels to 795 million - which USDA notes is still 14 percent above last year. The season-average farm price is unchanged at $5.60 per bushel.USDA's g...
Sino-Ag Roundup 2
Meat DemandChina is the largest consumer of meat, consuming 27 percent of world supplies and while pork has been the dominate choice, poultry demand has been on the rise along with beef. Poultry is winning due to price and its health halo, and beef is viewed as a premium product. The result is...
Market Commentary: Grains, Soyoil Sink in Pre-Holiday Trade; Soybeans, Cattle Strengthen
Pre-Thanksgiving trade is usually a light-volume, range-bound affair with few fireworks, but this year’s market action offered more interest than most. Corn futures indeed traded a tight range, but did so with surprisingly heavy volume that likely belies a rash of fund selling. Fund selling was...
Sino-Ag Roundup
Trade WarDonald Trump hasn’t even been sworn into office and is already roiling currency markets. The yuan, Mexican peso and Canadian dollar all slid this week on Trump’s social media claim that he will add tariffs on these three countries unless they stem the flow of drugs and illegal aliens i...
Market Commentary: Corn Falls, Soyoil Rallies on Trump Tariff Plans; Hogs Hit New Highs
News from Washington continued to be the primary driver of CBOT price action again on Tuesday, with most of the day’s action coming from plans for new import tariffs from President-elect Trump. The other news from Washington is the USDA APHIS’ ban on live cattle imports from Mexico, due to the...
China-Brazil Bilateral at the G20 Summit: New Deals to Be Announced
The G20 meets in Rio de Janeiro this week, and Presidents Luiz Inacio “Lula” da Silva of Brazil and Xi Jinping of China have a bilateral side meeting on their respective calendars. The agenda is focused on promoting development strategies between China and Brazil.Brazil’s Ag Minister Carlos Fav...
WASDE Soybeans - Nov 2024
WASDE Soybeans – USDA’s latest November estimate for the 2024/25 season is a decrease of 80 million bushels in U.S. soybean ending stocks to 470 million bushels. The U.S. season-average soybean price for 2024/25 is forecast unchanged at $10.80 per bushel. The soybean meal price is unchanged at...
WASDE Corn - Nov 2024
WASDE Corn – USDA’s latest November estimate for the 2024/25 season is a decrease in U.S. corn ending stocks to 1.938 billion bushels. The season-average corn price received by producers is unchanged at $4.10 per bushel. Global coarse grain production for 2024/25 is forecast to be slightly...
WASDE Wheat - Nov 2024
WASDE Wheat – USDA’s latest November estimate for the 2024/25 season is for an increase in U.S. wheat ending stocks by 3 million bushels to 815 million, up 17 percent from last year. U.S. wheat exports are unchanged at 825 million bushels. The season-average farm price is lowered $0.10 per bush...
Mercosur Regional Analysis
Wheat The long-awaited rains have finally arrived in southeastern Buenos Aires, with precipitation totals ranging from 20–50 mm. While the rainfall isn’t sufficient to complete the wheat crop, it provides relief to an area where plants were beginning to suffer. For now, it halts the declin...
Mercosur Regional Analysis: Soybeans
Last week, soybean trading saw a lot of activity, particularly with Brazilian old crop shipments and increased movement in U.S. new crop sales. CNF China trade levels began at 240X for the PNW and 255X for the U.S. Gulf, rising rapidly due to several factors. A drop in Chicago futures triggered...
Black Sea Regional Analysis
Russian Grain Markets: 30 September – 4 October 2024 The first week of September proved bullish in European Russia and slightly bearish in the Asian part and Siberia. The weather factor is important but it’s not the key driver. It may become the decisive factor later on depending on...
Market Commentary: Brazil Rains, Crude Oil Selloff Sink Soy Complex; Cattle Extend Rally on Beef Demand
Trade at the CBOT was mostly lower on Tuesday with the soy complex leading the way south as weather models show more promising rains for South America. Soybeans turned sharply lower on the forecasts and scored a bearish technical day on the chart, with additional selling pressure coming from th...
Market Commentary: Crude Oil Selloff Sinks Soyoil, Soybeans; Corn, Wheat Lower Ahead of Stocks Report
A surprise selloff in crude oil put heavy selling pressure on the CBOT soy complex on Thursday, with soyoil and soybeans scoring bearish reversals for the day. The weakness in the soy complex sent corn and wheat into the red as well, with traders unwilling to take more long risks heading into t...
Market Commentary: Soybeans, Soyoil Extend Rallies; Wheat, Corn Fall as Short-Covering Fades
The CBOT saw diverging trading patterns on Tuesday with soybeans and soyoil continuing their rallies and extending gains to new highs. China is rumored to be purchasing up to 1.2 MMT (44 Mbu or 20 cargoes) of U.S. soybeans for October-November delivery, which put a bid under the market. Too, th...
Mercosur Regional Analysis
Argentina Economic/Policy Update Argentine President Javier Milei, in a public speech this week, presented the 2025 budget that will be sent to Congress for approval. Farmers had high expectations for potential announcements that might improve their business or provide visibility concerni...
Market Commentary: Wheat Retraces; Soyoil Surges
Wheat was the big gainer last week but this week it gave up most of those gains. And soyoil was last week’s biggest loser but it rose to the top this week. Lean hogs also staged a major reversal after losing 1.32 percent last week and then rising 4.1 percent this week. Where there...
Market Commentary: Soy Complex Rises on China Rumors, Brazil Drought; Hogs Extend Rally
Soybeans saw the liveliest action of the major grain/oilseed contracts on Wednesday with a strong, 18-cent overnight rally developing on rumors of Chinese export business. That rally fizzled, however, after the USDA did not report any daily “flash” export sales at 9 AM ET and the ma...
WASDE Soybeans
WASDE SOYBEANS: USDA increased their estimate for global soybean ending stocks by 0.3 million tons to 134.6 million as higher stocks for Argentina and Canada are partly offset by lower stocks for the United States and the EU. U.S. soybean ending stocks are projected at 550 million b...
WASDE Corn
WASDE CORN: USDA’s outlook for 2024/25 U.S. corn is for smaller supplies and a modest decline in ending stocks to 2.1 billion bushels – a reduction of 16 million bushels. World corn ending stocks are projected to be 308.4 million tons, down 1.8 million. The anticipated impact...
Market Commentary: Wheat Rises on Plains Dryness; Corn, Soybeans Sink in Pre-WASDE Trade
Trading at the CBOT was mixed on Tuesday with expectations for the WASDE differing significantly. For corn and soybeans, traders and analysts are all in on the bearish side of things while there is some growing positivity for the wheat markets. That was reflected in Tuesday’s trade with s...
Market Commentary: CBOT Prepares for September WASDE
The CBOT started the week with a mood that was decidedly oriented towards preparing for the September WASDE report. Volume and price action were relatively limited for the day and cattle futures were the surprise bullish leaders. In the grains, corn and soybeans pushed higher with the latter ma...
Market Commentary: CBOT Dips as Short Covering Subsides; Livestock Fall on Macro Worries
The CBOT was mostly lower on Thursday as traders took a day to pause and reassess positions and the grain market outlook with just one day of trade left before the weekend. Too, the September WASDE is looming next week and traders are positioning and adjusting expectations in advance of that re...
Market Commentary: CBOT Rallies Sharply on Bullish Technicals; China-Canada Trade War Looms
The CBOT was nearly uniformly higher following the U.S. Labor Day holiday with wheat, corn, and soybeans all scoring strong gains and meaningful bullish technical developments. There wasn’t a major fundamental catalyst for any of the markets, rather the day’s trade seemed to build u...
Market Commentary: CBOT Rallies on Export Sales, Weather; Wheat Follows Through on Reversal
Thursday and Friday are the last two days of the month with a three-day weekend present to kick off September, which helped create a “risk off” short covering tone in the markets. Consequently, the major CBOT ag markets were all higher for the day with additional fundamental develop...
Market Commentary: Wheat Continues Reversal; Corn Soy Fall on U.S. Weather
The CBOT was mixed on Wednesday with wheat futures following through on Tuesday’s bullish technical reversal after Stats Canada forecast a 34-MMT all-wheat wheat crop, which was below traders’ expectations. That, combined with weather issues for some major wheat growing/exporting co...
Market Commentary: Little to Move the Market But it Moved Anyways
The only real market mover on this last trading day of the week was the Fed’s nod to rate cuts. It is still bearish in grains, and the soy complex continued its small rebound despite the prospect of record production. No doubt because of continued strong demand. It was the second da...
Cotton Market Basics and 2024/25 Outlook
Following recent client requests, WPI provides the following overview of the cotton market, its basic structure and recent trends, and a short outlook for MY 2024/25. Cotton Production World cotton production is highly concentrated with four countries (China, India, Brazil, and the...
Market Commentary: Wheat Hits New Contract Lows; Corn, Soybeans Fall on Record Yields
The CBOT was sharply lower on Thursday with the Canadian rail workers strike and forecasts of record-breaking yields emboldening bears. Wheat futures scored new contract lows amid signs of weaker demand while corn and soybeans saw threats primarily from the ever-expanding production outlook for...
Market Commentary: Corn Dips on Crop Conditions; Cattle Plunge on Lower Beef Values
The big themes from Tuesday’s CBOT trade were that wheat continues to find slow, cautious support amid a weaker U.S. dollar and troubles in Argentina while steady corn and soybean ratings resulted in muted trade for the latter two commodities. Corn futures drifted lower as specs are neith...
Balancing Offense and Defense; Border Measures; Economic Returns from Sport
Balancing Offense and Defense All growers of all crops are not necessarily competitive even in a large agriculture country. Major U.S. row crop growers have asked USTR to ensure that the Americas Partnership for Economic Prosperity (APEP) provide greater market access for their products. By con...
Market Commentary: Soybeans Make New Lows; Corn, Wheat Fall on WASDE Supply Expectations
The CBOT was once again mostly red for the day with traders preparing for the August WASDE and generally expecting large crops and ending stocks for the 2024/25 year. The Midwest weather remains nearly ideal for producing big crops, and the only real question is how harvested acreage will impac...
Market Commentary: Corn, Soy Fall on Weather, Crop Ratings; Wheat Firms on EU Worries
If Monday’s trade as all about the macro market meltdown, then Tuesday’s trade was about returning to normal. Global equity, bond, and currency markets mostly reversed course on Tuesday and pared back some of the massive losses they incurred over the past three trading sessions. Tha...
Market Commentary: Short Covering Caps Bearish Week; Cattle and Macro Meltdowns Continue
The CBOT saw some light short covering in corn, wheat, and soybeans develop after this week’s deeply bearish trade that brought new contract lows in all three commodities. There wasn’t a lot of bullish news, other than the continued hot weather forecast for the U.S. Midwest and conc...
Market Commentary: Corn, Soy Sink on Record Yield Chatter; Wheat Firms on Quality Worries
Corn, the soy complex, and cattle futures each saw extended weakness in Thursday’s CBOT trade with the crop markets coming under pressure from favorable weather conditions and forecasts for the U.S. There is increasing market chatter about record breaking yields for both corn and soybeans...
Market Commentary: Bears Concentrate on Soybeans, Wheat Scores Reversal
The CBOT started the week with a collapse in soybeans and the broader soy complex in early trade that pulled corn and wheat lower as well. Soybeans, soyoil, and wheat all scored new contract lows in the early selloff with funds eagerly extending their short positions. By the day’s end, ho...
Market Commentary: Corn, Soybeans Rise on Weather, Export Sales; Wheat Dips on Yields, Exports
The headline for the CBOT on Thursday was the unexpected surge in soymeal export sales that boosted that market and new crop soybeans to strong gains for the day. Soymeal exports have been a prominent support for the market this year and their recent uptick after December futures fell to near $...
Market Commentary: CBOT Rallies as Funds Cover Shorts, Markets Forge Bottom?
The CBOT was mostly higher for the day with the strength originating from the soybean market and spilling over into corn and soybeans. The soybean market derived its strength from new forecasts of hot, dry weather for the U.S. Midwest as the soybean crop approaches pollination and pod filling...
Summary of Recent Factors Driving Commodity Price Action
Recently, a WPI client asked if we could summarize the major factors that have driven commodity markets over the past several months. The goal is to succinctly describe how markets have ended up in their current state and examine the next major trend(s) that are likely to develop. This report,...
Market Commentary: Corn, Soy Post Half-Hearted Reversals; Hogs Extend Nascent Rally
Tuesday’s CBOT trade featured gains in corn and the soy complex with funds casually covering some of their massive short positions amid oversold technical conditions and following Monday’s damage-inducing storms across the Midwest. Conviction was lacking, however, and the day’...
Market Commentary: Bearishness Envelops CBOT Trade
The CBOT was sharply lower on Monday with markets seeing continued pressure from Friday’s generally bearish WASDE, favorable Midwest weather trends, and gains in the U.S. dollar following the weekend assassination attempt on former President Trump. The assassination attempt obviously does...
Mercosur Regional Analysis
Grains Weather Argentina has faced extreme cold across the country for several days with temperatures well below 0 degrees Celsius for many hours. This extreme weather impacts various crops. For maize still standing in the field, the cold aids in drying and thus speeds up the harves...
Geopolitical Trade Substitution
Historically, Canada has been the fourth largest producer of green peas and the largest exporter of the product. Canada’s global market share for the green pea trade was 37.9 percent in 2022, while Russia supplied 13.7 percent. Meanwhile, China is both the largest producer and importer of...
Market Commentary: Grains Fall as Bears Grab Control
Bears were solidly in control of trade at the CBOT on Monday with mostly favorable U.S. weather forecasts and expectations of a bearish July WASDE report driving price action. Grain and oilseed markets were lower overnight with Matif wheat futures leading the CBOT and KCBT into the red in early...
Market Commentary: Soyoil Leads Soy Complex Higher Again; Cattle Find Pre-Holiday Support
Once again, the excitement at the CBOT was dominated by soyoil, which posted its fifth straight higher close amid rising trade tensions between Indonesia and China. The rally in soyoil – and the broader vegoil complex – helped push soybeans higher and at one point November soybeans...
Market Commentary: Changing Winds for Soybeans, Wheat?
CBOT grain futures initially saw continued impacts from Friday’s surprisingly bearish USDA reports, but those shockwaves seemed to fade throughout the day, which left wheat and soybeans to trade higher. Wheat found support from dryness in the Black Sea and smaller crop estimates for Russi...
Trade Spat Between China and EU
When President Biden announced higher Section 232 tariffs on a list of Chinese goods (see WPI 14 May) anxieties were raised over possible retaliation (see WPI 10 June). Right now, the EU is on the leading edge of the tariff tit-for-tat. Yesterday, China announced its Ministry of Commerce would...
Market Commentary: Crop Progress Data Pressures CBOT; Hogs Collapse on Demand Worries
The CBOT was once again mostly lower with traders shedding position length and getting short as U.S. farmers make solid strides seeding the 2024 crop. There are certainly some areas of concern and potential for some acres to be planted to soybeans at the last minute, but the overall outlook is...
Mercosur Regional Analysis
Wheat Determining how much wheat will be planted in Argentina is difficult. Production margins have gone from very bad to very good, thereby encouraging producers to change their minds about planting intentions. An increase in area is certain; in fact, the top market seed varieties are al...
Livestock Roundup: China Beef Market
China has just banned beef exports from the JBS plant in Greeley, Colorado over ractopamine. A shipment of frozen omasum (the third stomach in a ruminant animal) tested positive in China for ractopamine, which is banned in China. Additionally, a cold storage facility in California, Cool Point O...
Market Commentary: Soyoil Sinks as Cooking Oil Escapes Tariffs; Grains Fall on Crop Progress
The CBOT pushed higher overnight with corn notching a new four-month high and wheat futures extending their rally, but that strength quickly faded during the day session. One of the biggest drivers for the day’s declines was the failure of used cooking oil to be included in the Biden Admi...
Tariffs: UCO No, Phosphate Yes
The Biden Administration just announced higher Section 301 tariffs on a host of imports from China, after the statutory four-year review of those duties imposed by the Trump Administration. The new tariffs did not include the rumored increase for used cooking oil (UCO) that roiled soybean futur...
Mercosur Regional Analysis
Wheat Brazil’s state of Rio Grande do Sul is experiencing the worst climatic catastrophe in the last 80 years, with intense rains causing major floods. There are many dead, injured, and evacuated individuals. Rio Grande do Sul represents approximately 50 percent of the country's wheat pro...
WASDE Soybeans
USDA’s outlook for 2024/25 U.S. soybeans is for higher supplies, increased exports, and higher ending stocks. The soybean crop is projected at 4.45 billion bushels, up 285 million on higher area and trend yield. U.S. ending stocks for 2024/25 are projected at 445 million bushels, up...
WASDE Corn
USDA’s outlook for 2024/25 U.S. corn is for modestly larger supplies, increased exports, and higher ending stocks. The yield projection of 181.0 bushels per acre is based on a weather-adjusted trend. Total corn supplies are forecast at 16.9 billion bushels, the highest since 2017/18. U.S...
WASDE Wheat
USDA’s outlook for 2024/25 U.S. wheat is for larger supplies, increased exports, and higher ending stocks. Supplies are projected to increase six percent from 2023/24. U.S. wheat yield is projected at 48.9 bushels per acre, up 0.3 bushels. 2024/25 ending stocks are eleven percent above la...
Mercosur Regional Analysis
Corn Estimates of Argentina’s corn harvest continue to decrease, mainly due to the impact of Spiroplasma bacteria. The Rosario Grain Exchange lowered its estimate from 57 to 50.5 MMT, while the Buenos Aires Grain Exchange revised their’s from 52 to 49.5 MMT, marking the second conse...
WASDE Soybeans
USDA increased U.S. soybean ending stocks for 2023/24 by 25 million bushels to 340 million. The U.S. season-average soybean price for 2023/24 is forecast at $12.55 per bushel, down 10 cents. Soybean meal and oil prices are unchanged at $380 per short ton and 49 cents per pound, respectively. Gl...
WASDE Corn
USDA increased the U.S. corn use for ethanol and feed – which reduced ending stocks 50 million bushels to 2.1 billion. The season-average farm price is lowered 5 cents to $4.70 per bushel. Global corn ending stocks are estimated to be 318.3 million tons, are down 1.4 million from last mon...
WASDE Wheat
USDA raised U.S. wheat ending stocks for 2023/24 by 25 million bushels to 698 million, 22 percent above last year. The season-average farm price is reduced $0.05 per bushel to $7.10. The 2023/24 global wheat outlook this month is for smaller ending stocks, down 0.6 million metric tons to...
Hogs and Pigs in China
As WPI reported last Thursday, the number of breeding sows on 1 March was 6.016 million head, down 2 percent from year ago levels. Part of that reduction is being offset by continued records in pigs per little, which in the December to February quarter reached 11.53 head. Herd culli...
Market Commentary: Technical Trade Dominates on Quiet Fundamentals
The CBOT was mixed to end the week with scant, fresh fundamental news leading to more technically-oriented trade over the past few weeks. Wheat futures were the downside leader as deteriorating chart conditions and China’s recent cancellations of U.S. SRW export bookings weighed on trader...
Market Commentary: Short Run Bulls Battle Long Run Bears
The CBOT is fighting a battle between improving short run technicals and bearish long run fundamentals, which is apt to keep the market choppy heading into planting season. Technical traders won Monday’s battle in the grains at least, with corn and wheat pushing higher and the latter scor...
WASDE Soybeans
Soybeans: USDA’s March estimate is that U.S. soybean supply and use for 2023/24 is unchanged from February. The U.S. season-average soybean price and the soybean meal price forecasts are unchanged for 2023/24. The soybean oil price is reduced 2 cents to 49 cents per pound. Glo...
WASDE Corn
Corn: USDA’s March estimate is that 2023/24 U.S. corn outlook is unchanged from February. The season-average corn price received by producers is lowered to $4.75 per bushel based on observed prices to date. Global corn ending stocks are down 2.4 million to 319.6 million tons...
WASDE Wheat
Wheat: USDA’s March estimate is that U.S. ending stocks are increased 673 million bushels and are 18 percent higher than last year. The season-average U.S. farm price is reduced $0.05 per bushel to $7.15. The global wheat ending stocks are lowered 0.6 million tons to 258.8 million,...
Market Commentary: Interesting Trade Despite Few WASDE Changes
The CBOT posted interesting developments on Friday, even while the March WASDE report failed to offer the same intrigue. The USDA’s latest look at U.S. and world supply and demand fundamentals was largely a “steady as she goes” affair with few significant changes. Despite the...
Black Sea Regional Analysis
Russian Grain Markets: 26 February–1 March 2024 Russian grain markets remained bearish following the global trend exports are the key driver. For several weeks in a row, Russian pea prices have climbed higher and higher and as long as there is no export duty for peas, this commodity will...
Market Commentary: Wheat Rallies on Hail in India; Corn, Soy Turn Higher on Technical Buying
The CBOT was mostly higher to start the week with unexpected hail and rain damage to India’s wheat crop lifting world wheat markets while corn and soybeans followed through on last week’s supportive technical trade. Funds were net buyers across the CBOT for the day despite holding a...
Mercosur Regional Analysis
Wheat Wheat is going through a challenging time in Argentina. The decline in prices, both in the local and export markets, has been constant over the last few months and has pushed values to levels that are very difficult for producers to absorb. Currently, in the local market, transactions are...
Market Commentary: Consolidation Continues as CBOT Contemplates Record Fund Short Position
Tuesday’s mood at the CBOT seemed to be one primarily of consolidation and mild short covering. Corn futures extended Monday’s key reversal but failed to make much upside progress while the soybean market settled lower after posting 16-cent gains in early trade. Wheat futures pushed...
Mercosur Regional Analysis
Soybeans Market Overview Following the Chinese Lunar New Year holiday, expectations for increased soybean demand from China were not met, resulting in a lower-than-anticipated purchase volume. There was still some activity, however, and last week Brazil saw movement for March...
More China Pork
As noted yesterday, China’s pork imports appear to have recently turned higher despite supposedly over-abundant and under-valued domestic supplies. In an article about the over-supply of pork in the U.S. market, the Wall Street Journal cited declining sales to China during the first 11 mo...
China’s Pork Dilemma
When African Swine Fever (ASW) struck China late last decade, animals were euthanized and actual swine numbers fell from their high by nearly 38 percent. Meanwhile, pork imports understandably rose dramatically to fill the void and consumer demand. Imports fell as the domestic herd recovered. D...
WASDE Soybeans
USDA’s February estimate is for U.S. soybean ending stocks to increase by 35 million bushels to 315 million bushels. The U.S. season-average soybean price for 2023/24 is forecast at $12.65 per bushel, down $0.10 from last month. The soybean meal price is forecast unchanged at $380 per sho...
WASDE Corn
USDA’s February estimate for U.S. corn ending stocks is increased 10 million bushels to 2.172 billion bushels. Corn used for glucose and dextrose is reduced 10 million bushels based on indicated usage to date. With no other use changes, the season-average corn price received by producers...
WASDE Wheat
USDA’s February estimate is for a slight increase in U.S. wheat ending stocks by 10 million bushels to 658 million for 2023/24. That is because food use is reduced 10 million bushels to 960 million, on lower wheat flour grinding - as indicated in the NASS Flour Milling Products report rel...
Market Commentary: A Day of New Numbers
It might have been a day of big surprises given the number of new crop estimates being issued around the world. Governments in China, Brazil, Canada, and the U.S. all issued new forecasts, but the overall changes were relatively small. The result was a mixed day in U.S. futures markets. Volume...
Black Sea Regional Analysis
Russian Grain Markets: 29 January–2 February 2024 The market was bearish following global trends and huge stocks will continue putting pressure on the market. It is hard to figure out why the government would further increase export duties seeing that the global trend is bearish and expor...
Market Commentary: Corn Falls on Early Selling; Wheat Continues Sideways March; Cattle Extend Rally
The CBOT ag markets spent most of Tuesday preparing for the coming February WASDE report with funds and commercials adjusting positions. Wheat futures saw mild strength amid their relentless grid sideways while the soy complex found some upside traction in follow-through trade from Monday&rsquo...
Market Commentary: China Economic Worries Shake Grain Markets, Soybeans End Below $12, Corn at $4.40
The CBOT was mostly lower to start the week with commodity and macroeconomic markets under pressure from bearish economic news in China. Over the weekend, a court ordered China’s largest real estate developer, Evergrande, to liquidate amid the ongoing bankruptcy. That sent bearish ripples...
Market Commentary: China Approval of Argentine Wheat Snaps Futures’ Winning Streak; Livestock Rally Accelerates
Grain/oilseed and livestock markets are currently headed in diverging directions – with commodities involving plants and tractors falling while commodities eating said plants rallying sharply. Soybeans were the downside leader at the CBOT after the Buenos Aires Grain Exchange said the Arg...
Market Commentary: Wheat Rallies on China Buying Rumors, Spring Acres Estimates; Hogs Extend Gains
The CBOT was mostly higher at midweek with grains – particularly wheat – leading the rally. Market chatter suggests China has returned to the U.S. to book SRW wheat, though we cannot find confirmation of such trades yet. Even so, the words “China buying” will create a ra...
Market Commentary: CBOT Higher on Short Covering, Bull Spreading; Hogs Post Technical Rally
The CBOT finished higher for the day with traders increasingly engaging in bottom-picking and hopeful that last week saw the grain market develop its near-term and seasonal lows. Grain and oilseed markets started the day session with noted strength, but only soybeans, soymeal, and KC wheat coul...
Market Commentary: Dead Cat Still Bouncing
Thursday saw the start of a “dead cat bounce” for many oversold CBOT futures contracts, and that trend continued Friday. Corn and wheat futures finished higher for the day but posted the gains on unconvincing volume and with little in the way of meaningful technical developments. Th...
China Pork and Beans
China’s National Bureau of Statistics reports that pork production increased 4.6 percent in 2023 to 57.94 MMT. This makes the fourth consecutive year of production increases since the trough of 2019 at the height of the African Swine Fever outbreak. Over 80 percent of soybeans in China ar...
WASDE Soybeans
USDA reduced the 2023/24 season-average U.S. soybean price by 15 cents to $12.75 per bushel. The soybean meal price is projected at $380 per short ton, down 10 dollars. The soybean oil price is forecast at 54 cents per pound, down 3 cents. Global soybean production is raised 0.1 million tons to...
WASDE Corn
USDA reduced the 2023/24 season-average U.S. farm price of corn by 5 cents to $4.80 per bushel. Corn production is estimated at a record 15.3 billion bushels. U.S. corn stocks are up 31 million bushels. Foreign corn production is forecast higher with increases for China, India, and Paraguay par...
WASDE Wheat
USDA reduced the 2023/24 season-average U.S. farm price of wheat by $0.10 lower to $7.20 per bushel. The global wheat outlook for 2023/24 is for larger ending stocks compared with last month. Global supplies are raised 3.6 million tons to 1,056.5 million. Increased stocks for Russia, Ukraine, a...
Bread Baskets
Import dependence for food rankles most politicians since they have persistently fed a nationalistic feedback loop on the issue to their constituents. No one is demanding that their television sets be manufactured locally, but food is national security and others can’t be trusted. This is...
Black Sea Regional Analysis
Russian Grain Markets: 1–5 January 2024 Most of Russia’s regions have been celebrating the New Year holidays and the the Russian Orthodox Christmas resulting in a slowdown of grain shipping in the Black Sea. Previously signed contracts are being fulfilled and most likely there will...
Mercosur Regional Analysis
Policy and Macroeconomic Update There is discomfort among farmers in the Argentine countryside. The newly inaugurated Milei administration promised during its campaign measures that would favor producers, but for the moment is not fully keeping its word. Although the changes to the exchange rat...
Russian Agriculture Enigma; Imbalanced Analysis
Russian Agriculture Enigma Among the many elections this year is Russia’s during 15-17 March. Vladimir Putin will be overwhelmingly elected. He has been effectively in control of the country for 23 years. Andrei Kolesnikov at the Carnegie Endowment for International Peace says that Russia...
Livestock Roundup: Hog and Pork Restructing in China
China is in its holiday season; first was the Winter Solstice, the shortest day of the year, on 22 December. Next is the Lunar New Year which begins on 10 February. Both traditionally mark seasonal demand for pork. We know that last year, after extended COVID lockdowns through 2022, the 2023 Lu...
Black Sea Regional Analysis
Russian Grain Markets: 11–15 December 2023 Russian agriculture has had a difficult year with global sanctions in place creating problems with inputs like seeds, fertilizers, chemicals, spare parts, and western equipment. In an effort to help, the government provided subsidies to farmers a...
Market Commentary: Corn, Soy Complex Slide Sideways; Wheat, Cattle Extend Rallies
Trade at the CBOT was mostly a low-volume affair heading into the weekend and there was a growing sense that, except for wheat and cattle, most of the week’s activity had already been completed. The soy complex was mixed as soybeans and soymeal were mostly lower while soyoil rallied on te...
Black Sea Regional Analysis
Russian Grain Markets: 4–8 December 2023 As of 8 December, the Russian government reports the wheat crop at 95 MMT in bunker weight versus 105.6 MMT a year ago. The information from the Ministry is delayed and is usually adjusted several times. Wheat was reportedly harvested from 29.1 Mha...
Market Commentary: Crude Oil Pulls Soy Complex Lower; Wheat Rises on Growing Demand
The CBOT was mixed on Tuesday with the three legs of the soy crush all trading lower amid technical selling and a steep selloff in crude oil values. In contrast, the wheat market managed to shrug off Monday’s dramatic declines and push higher with signs that world demand is starting to in...
Mercosur Regional Analysis
Argentina’s Policy and Macroeconomic Situation Argentina’s trading last week was shortened due to a national holiday on Friday. At the same time, it was the week before the newly elected President took office on Sunday, and expectations of a dramatically different approach to...
Livestock Roundup: China Hog and Pork Situation
CME cattle futures have grabbed the attention in the U.S., but in China, hog futures are the focus. January hog futures on the Dalian exchange are at a new contract low of ¥14.07/kg which is down about 4 percent. March futures are down about 3 percent with higher volume and a 10 percent dec...
Market Commentary: Brazil Rains, Profit Taking Push CBOT Lower; Cattle Find New Contract Lows
The CBOT turned red for the day with the rallies in wheat and corn fading with the December WASDE looming on Friday. USDA reported fresh SRW wheat export sales to China, which boosted wheat futures initially, but there was a subsequent sense of reluctance to exit profitable short positions ahea...
Market Commentary: Second Day of SRW Sales to China Boosts Wheat; Pre-WASDE Consolidation Begins
Trends at the CBOT continue to diverge with wheat futures rallying sharply on fresh Chinese interest in U.S. SRW wheat. The wheat market has been the upside leader for the past several sessions as a combination of growing bullish fundamentals and aggressive fund short covering lift the market...
Market Commentary: Rains Send Soy Complex Lower; China Sales, Short Covering Extend Wheat Rally
Rains in Brazil and Argentina heavily influenced the CBOT to start the week and sent the entire soy complex sharply lower. The precipitation also weighed on corn futures, which settled essentially unchanged, but was offset by the continuing rally in wheat futures. Wheat was again sharply higher...
Mercosur Regional Analysis
Wheat Argentina’s wheat harvest keeps moving at high speed and advanced 10 percent last week, which put the total harvest above 35 percent of the area. Most fields are being harvested 7-10 days earlier than usual, which is why at this point last year the harvest was only 20 percent comple...
Market Commentary: Exports versus Weather and Crude Oil
It was a mixed day for futures trading with corn and wheat rebounding from early week contract lows but the soy complex sliding lower on a weak petroleum market that dragged soyoil down with it. Weather added a bearish overlay as rains continue to be helpful for Argentina and the forecas...
Black Sea Regional Analysis
Russian Grain Markets: 20–24 November 2023 Russian markets remained quite volatile, however, the Asian area finally stabilized because Kazakhstan seems to have replenished their stocks for the moment. The Siberian market is stable and although prices for 3rd grade milling wheat are...
Suppliers Look at China
China has just over 18 percent of the world’s population, but its food imports and consumption share of world food supplies varies greatly. Soybeans are a well-known story. The Middle Kingdom consumes 30 percent of the world’s soybeans and, to its chagrin, it imports 62 percent of t...
European Market Analysis
Regional News Russia has shipped two vessels of wheat to Somalia and Burkina Faso as part of the country’s promise to send free grain to Africa. China purchased 66 KMT of feed corn from Ukraine at $248/MT C&F for December shipment. Through 24 November, Ukraine has ex...
De-Risking and Food
The Biden Administration went through a rapid succession of descriptors for its trade policy toward China before settling on de-risking. It initially called for decoupling but switched to re-shoring. This upset allies and so next it tried friend-shoring. It has stuck with de-risking for a while...
Market Commentary: Good Exports but Brazilian Wildcard
The market was in the red across the board at the open and mostly stayed that way. The exceptions being corn and lean hogs. They broke to the upside late morning and while lean hogs wobbled, both were in the green at the close. Despite the downbeat of the past two sessions, corn and the s...
Market Commentary: China Buying and Soymeal Demand Sends Soy Complex, Corn Higher
The CBOT was mostly higher to start the week with sharp rallies in soymeal and soybeans creating spillover buying for the rest of the grain markets. Funds were active buyers in both markets with strong spot demand for soymeal driving that market’s rally while soybeans rallied on Chinese b...
Over-greening Bees; China versus Labor; Farm Policy
Over-greening Bees In 2018 we were all warned that a third or more of our food supply was being threatened by the struggles facing bees. Europe focused on insect pollinator health, including banning (with exceptions of course) neonicotinoid pesticides as a threat to pollinators. American resear...
What Could the Biden Xi Meeting Yield?
U.S. President Biden and Chinese President Xi will meet in San Francisco on Wednesday to discuss key geopolitical issues and “managed trade.” The geopolitical discussion will focus on the latest developments with North Korea, and, additionally, issues that have potential impacts on...
WASDE Soybeans
Soybeans: USDA’s outlook for 2023/24 is higher U.S. ending stocks, up 25 million on higher yields, to 245 million bushels. The U.S. season-average soybean price for 2023/24 is forecast at $12.90 per bushel, unchanged from last month. The soybean oil price was reduced 2.0 cents to 61.0 cen...
WASDE Corn
Corn: USDA’s outlook for 2023/24 is higher U.S. ending stocks by 45 million bushels to 2.2 billion. The season-average corn price received by producers is lowered 10 cents to $4.85 per bushel. This month’s 2023/24 global corn ending stocks, at 315.0 million tons, are up 2.6 million...
WASDE Wheat
Wheat: USDA’s outlook for 2023/24 is for higher U.S. ending stocks by 14 million bushels to 684 million. The projected 2023/24 season-average U.S. farm price is lowered $0.10 per bushel to $7.20. The global wheat outlook for 2023/24 is for larger ending stocks, raised 0.6 million, to tons...
Market Commentary: CBOT Rallies Sharply Ahead of November WASDE
The November WASDE usually isn’t a major market-moving event, but you wouldn’t know that from how CBOT futures reacted just one day before the report. Wheat – the bearish laggard of the grain complex – jumped to 20+ cent gains at mid-week with little apparent reasoning...
Black Sea Regional Analysis
Russian Grain Markets 23–27 October 2023 As of 27 October, winter crops were planted over 18.5 Mha versus the 20 Mha planned by the government. If Russia reaches this number, it will be up 1.5 Mha from last year. This also includes occupied territories of Ukraine, according to the g...
China’s Wheat Demand Trend
Mercosur Regional Analysis
Wheat After Argentina’s recent presidential election and in anticipation of the runoff election, the current government extended the possibility for all exports of goods and services to access 30 percent of the foreign currency at a higher exchange rate. This move was made to keep financi...
Market Commentary: New Highs in Soymeal; Cattle Finally Turnaround; China Washes Out Brazilian Soy Cargoes
The CBOT largely followed its existing trends into the weekend, which meant rallies in soymeal and soybeans, new contract lows in wheat, and sideways trade in corn and soyoil. Live cattle futures finally posted what WPI views as an overdue correction from Monday’s collapse with steady/fir...
Market Commentary: Soymeal Flashes Reversal; South American Rains Douse Corn, Soybeans
The CBOT was heavily influenced by fresh forecasts for beneficial rains in South America over the next two weeks. Rains will offer relief to drought-afflicted Argentina and keep Brazil’s soybean planting (roughly one-third finished so far) moving forward. Moreover, the shift toward a wett...
Farm Bill Schedule; Digital Protectionism
Farm Bill Schedule Congressman Mike Johnson (R-Louisiana) appears poised to capture the position of House Speaker. If successful, he will prove the axiom that it is not the best candidate that wins a position, but rather the least disliked. He also heard and responded to complaints from the Hou...
Black Sea Regional Analysis
Russian Grain Markets: 16–20 October 2023 As of 20 October, Russian farmers harvested grains and pulses from 44.6 Mha which is in line with last year (44.5 Mha), averaging 3.08 MT/ha versus 3.33 MT/ha, a record-breaking year in Russian history. Interestingly, Russia first reports th...
Beyond Fundamentals
The Brazilian share of China’s corn imports over the past three months has been nothing short of impressive. It can be argued that U.S. corn should have been more competitive given that its ending stocks are nearly seven times larger but that was not reflected in pricing. Besides,...
Market Commentary: CBOT Fails to Maintain Technical Strength; COF Report Sinks Cattle Futures
Last week’s trade saw major ag commodities rally on bullish technical developments with corn, soybeans, and soymeal all topping key chart points. That strength did not last, however, as the CBOT turned lower in what was a weak day across most markets. The situation in the Middle East cont...
Elbow for an Eye; Eye for an Eye
Elbow for an Eye Legislation aimed at China has been introduced in the U.S. Congress to restrict foreign ownership of farmland. However, it is more nimble state legislators who are increasing restrictions on China in their jurisdictions. Arkansas has just ordered Syngenta to sell 160 acres of f...
Market Commentary: Export News and Rumors Create Mid-Week Strength
Strength developed at the CBOT on Wednesday with another strong rally in soymeal helping pull soybeans higher and, in turn, support the corn market as well. Fresh news is a bit lacking right now, so export news and rumors of possible sales have an outsized influence on the market. Soybeans cont...
Market Commentary: Soy Complex Rallies on NOPA Report; Exports Improve as Barge Rates Fall
The soy complex was the upside leader at the CBOT to start the week with a bullish NOPA report driving the markets. NOPA reported a record-large September crush and soyoil stocks at nine-year lows, which sent soybeans and soyoil futures higher for the day. Beyond that, grain and livestock marke...
Mercosur Regional Analysis
Sorghum Little has been said about the sorghum crop in Argentina, but it is having a very particular year. The 2023 crop produced 2.5 MMT according to the Buenos Aires Grain Exchange on 845,000 hectares of harvested land. This is far below the nearly-3.5 MMT harvested in 2020/21 and 2021/...
China Hoovering Up Wheat
China made a rare purchase of U.S. wheat and is on track to make record overall purchases this year. Domestic consumption of wheat has been growing at a 2.6 percent annual rate at the same time domestic production is increasing by 0.66 percent. Exacerbating the situation this year is excessive...
WASDE Soybeans
USDA kept their estimate unchanged at 220 million bushels for U.S. soybean ending stocks. The estimate for U.S. production was reduced 42 million on lower yields, but beginning stocks were increased and soybean exports reduced 35 million bushels to 1.76 billion (due to increased competition fro...
WASDE Corn
USDA reduced their estimate for U.S. corn ending stocks by 110 million bushels to 2,111 million bushels for 2023/24. This is still a healthy ending stocks, but the estimated season-average corn price received by U.S. farmers was raised 5 cents to $4.95 per bushel. Global corn stocks are down 1...
WASDE Wheat
USDA increased U.S. wheat ending stocks by 55 million bushels to 670 million, up 15 percent from last year. The season-average farm price is reduced $0.20 per bushel to $7.30 on higher projected stocks for the remainder of the marketing year. The global wheat outlook for 2023/24 is for lower st...
China’s Food Autarky
Zhang Hongzhou at Nanyang Technical University in Singapore says that geopolitical tensions, war, and climate change have refocused China on food self-sufficiency. Not that it had lost importance, but it is now receiving greater attention. He quotes Chinese President Xi Jinping stating, "Histor...
Market Commentary: Corn and Livestock Bulls Revived; Wheat, Soy Struggle Under Bearish Pall
Grains and livestock markets traded opposite directions to end the week with non-meat products ending lower amid profit taking and pre-WASDE position adjustment while livestock futures rallied across the board. One might have expected grain futures to post gains to end the week, given the week&...
Market Commentary: Wheat Firms Again as China Buys SRW; Cattle Crash Through Support
The CBOT was mixed on Tuesday with wheat following through on Monday’s sharp rally after USDA announced 220 KMT of SRW sold to China for 2023/24. That, combined with growing commercial demand for HRW wheat and stronger Paris milling wheat futures helped wheat futures rally for the day. Co...
Mercosur Regional Analysis
Weather Outlook The arrival of the expected "El Niño" weather event for Argentina continues to be delayed, and the situation is becoming more complex every day. There is a very large area that includes the western part of Buenos Aires, the eastern part of La Pampa, the provinces of...
Market Commentary: Reports Tank Soy Complex and Wheat; Corn Stocks Bullish but Market Falls Anyway
The much-anticipated Grain Stocks report failed to match expectations in terms of supply data, but more than exceeded hopes for an exciting day of trade. The USDA’s headline report – the Grain Stocks as of 1 September – and the Small Grains summary report sent wheat and the so...
Responding to China
EU Trade Minister Valdis Dombrovskis is headed to China, reportedly with the message to sign onto some form of trade agreement giving Europe assurances of a more balanced relationship, or risk things getting worse. It doesn’t help when Beijing’s rhetoric is over-wrought. The EU has...
Chinese Energy Imports: Crude Oil at Record Levels
There has been much attention to, and discussion of, China’s declining two-way trade volumes. China is a trade dependent economy, with imports of many commodities and goods fueling its manufacturing and processing sectors and exports bringing in hard currency. China’s trade flows, h...
Mercosur Regional Analysis
Wheat Despite recent rains and improvements in the wheat crop’s overall state, the Rosario Grain Exchange has reduced its production estimate by 600,000 MT, which now stands at a total production of 15 MMT. This is because the area from the center of the Cordoba Province northward and wes...
Black Sea Regional Analysis
Russian Grain Markets: 4–8 September 2023 Russian grain markets remained bearish, however, export volumes of all agricultural commodities from Russia remained stable. Russia has no navigation restrictions across the Black Sea. Going through Bosporus or any other channel, Russia can...
WASDE Soybeans
USDA reduced U.S. soybean stocks for 2023/24 to 220 million bushels, down 25 million from last month. Global soybean ending stocks are reduced 0.2 million tons to 119.2 million. The season-average soybean price is forecast at $12.90 per bushel, up $0.20 from last month. The soybean meal p...
WASDE Corn
USDA made slight increases in U.S. corn for 2023/24 - U.S. corn outlook is for slightly larger supplies and use unchanged. The result is ending stocks are up 19 million bushels to 2.2 billion. The season-average corn price received by farmers is unchanged at $4.90 per bushel. Foreig...
WASDE Wheat
USDA made no changes in total U.S. wheat for 2023/24. Global supplies are projected to decline 7.2 million tons to 1,054.5 million, primarily on lower production for Australia, Canada, Argentina, and the EU, which is only partly offset by an increase for Ukraine. World ending stocks are r...
Brazil and China Dominate Beef Market
A drop in U.S. beef exports is corresponding with the cattle cycle fall in production. U.S. beef production is falling by a half million tons, with domestic consumption losing about half that amount, and reduced exports offsetting about a third of the lower output. The export drop looks more si...
Market Commentary: Futures Unfazed by Heat but Barge Rates Soar; Crush Report Shows Soyoil Demand
The CBOT was mostly flat in quiet trade to end the week with traders showing little concern for a weekend of hot, dry weather for most of the crop-growing U.S. Corn and soybeans managed to find their way to modest gains on short covering and some reaction to the weather, but wheat futures ended...
Market Commentary: Sliding into Fall
It was another day of the weather and Chicago working at cross purposes. Continued heat and dryness are expected to knock corn and soybean yields lower but it was another day of losses for grains and oilseeds. There may be some profit taking ahead of the upcoming three-day holiday weekend, but...
Market Commentary: Lots of Mixed Messages
You are reading this report to better understand the issue of risk. This might make you unusual since the Global Financial Literacy Excellence Center reports that respondents to its surveys show only 35 percent answer questions correctly about the topic. Then again, it is a tricky subject. Even...
More BRICS, Same Problems
The BRICS Group, a club of nations with the goal of tilting the international order away from the West, has invited six countries to join and make it an unhappy family of eleven. We previously noted the shortcomings of the original BRICS and the new cousins have similar genetic defects: A...
BRICS Domination
The BRICS countries (Brazil, Russia, India, China, South Africa) meeting in South Africa are being noted for contributing a higher share (31.5 percent) to global GDP than the G7 (30.7 percent). They also comprise 26.7 percent of the world's land surface and 41.5 percent of the global population...
China Flips on Food
Washington goes paranoid over import dependence on microchips and EV’s, but not food despite a recent trade deficit in grub. Nations that have experienced starvation in the past, such as those in Europe and China tend to focus on food self-sufficiency. Until recently, the mantra from Beij...
Feast or Famine
The COVID supply chain meltdown created anxiety over the availability of agricultural inputs. This compelled many operators to look forward and lock in their needs for 2023, often at elevated prices. This buy-high insurance marker has been met with ammonia prices that have now fallen by 50 perc...
Mercosur Regional Analysis
Macroeconomics After Argentina’s elections and currency devaluation, it experienced another week filled with rumors and uncertainty. Financial and parallel exchange rates adjusted automatically, causing the gap against the official rate to exceed 100 percent, which was worse than before t...
Market Commentary: Midwest and CBOT Heat Up; Hog Rally Eases Discount; Cattle Supplies Tighten
The CBOT was almost uniformly higher to end the week as crop markets are increasingly concerned about the coming two-week weather forecast. The next week will be extremely hot and dry for the Midwest and corn and soybean yields are likely to take a hit. Just how hard-hit they will be remains th...
Market Commentary: CBOT Breaks Support on Crop Ratings, China Data; World Water Worries
The CBOT was sharply lower for the day with wheat, corn, and soybeans all breaking major technical support points. Yesterday’s better-than-expected Crop Conditions report from USDA added pressure overnight, despite the two-week forecast for very hot temperatures and dry conditions for the...
Trade Deficit Focus; Measuring Up China
WASDE Soybeans
USDA reduced their estimate for U.S. soybean ending stocks to 245 million bushels, down 55 million from last month. The first survey-based soybean yield forecast of 50.9 bushels per acre is reduced 1.1 bushels from last month. The U.S. season-average soybean price for 2023/24 is forecast...
WASDE Corn
USDA increased their estimate for 2023/24 U.S. corn outlook beginning stocks by 55 million bushels. However, the estimate for total supply declined more than use and that caused ending stocks to decline by 60 million bushels to 2.2 billion. The season-average corn price received by producers is...
WASDE Wheat
USDA reduced their estimate for U.S. wheat production to 1,734 million bushels, down 5 million from last month as lower Other Spring and White wheat production is partially offset by increases for Hard Red Winter (HRW), Soft Red Winter, and Durum. The all-wheat yield is 45.8 bushels per acre, d...
China In-Country Analysis
Macroeconomics Food Costs See Sharp Drop in July After a Sizable Uptick in June Food prices have whipsawed this summer after seeing a steady climb in Q2. After a 1 percent uptick in May, the average cost of food moved up 2.3 percent in June from the year prior. While pork prices fell by 7.2 per...
Market Commentary: Calm before the Calm
Early pattern recognition on the CBOT today ahead of tomorrow’s August WASDE report - bottom line no drama. Volume was slack, except in lean hogs, and trading ranges were muted. December corn had a trading range of 4.75 cents, which is to say it is settled science. Except for Monday, over...
Market Commentary: U.S. Weather Shifts Again; WASDE Expectations; Ethanol Margins Climb
The CBOT was mixed at midweek with pre-WASDE positioning once again driving much of the day’s activity. Corn attempted to rally on short covering and continued strength in Dalian futures, but rallies were again capped above $5 by selling pressure. Soybeans and soyoil managed to squeeze ou...
Market Commentary: Shorts Grow Cautious Ahead of WASDE
The CBOT posted a mixed day in light volume trade with preparations for the August WASDE that will come out this Friday driving much of the market action. Corn and the soy complex finished mostly higher while wheat was mixed as traders seem cautious against becoming overly short the market. Tra...
Big Picture Trade Snapshot
U.S agricultural exports through May (the June data will be released on Thursday) show that among the 213 categories tracked for agriculture, exports are down year-to-date from last year by 8.5 percent in value, while imports are down 0.3 percent. Overall, that is a 4.4 percent drop in two-way...
Mercosur Regional Analysis
Corn In addition to implementing a differential exchange rate for corn, exporters were granted a 240-day extension to fulfill export permits that had shipment dates between 24 July and 30 September and the exportable surplus was increased to 26 MMT. With this extension, the government eases pre...
Market Commentary: Attacks on Russian Ports Lift Grains; Feeder Cattle Hit All Time Highs
In a twist on the recent Black Sea narratives, CBOT futures were higher overnight after Ukraine attacked Russian port infrastructure in the Crimean Peninsula. Reports came overnight that Russia’s oil export infrastructure in the Novorossiysk port had been attacked by naval drones (presume...
Market Commentary: No Gapping Day
When the close is not too far off the open, the trading range is small and the volume is light, the price must be right. Markets continued their quotidian march generally lower but in a modest way. This no doubt reflects a weather forecast that spells recovery from an otherwise dis...
Market Commentary: CBOT Sheds Weather Premium on Forecasts of Midwest Rains
Weekend weather model runs continued to show beneficial rains for the Midwest and Plains over the next two weeks with more moderate temperatures. The forecast comes just as the corn crop finishes pollinating and enters peak kernel fill while the soybean crop will enter its key yield-defining pe...
Threats to China Soybean Demand
Hovering over the issue of soybean demand is China’s reported slowing GDP growth. Second quarter growth was reported at 6.3 percent, far better than the 1.1 percent U.S. growth. Though China’s growth in real terms versus year-on-year was an annualized 3.2 percent. Critics will even...
WASDE Soybeans
Soybeans: USDA reduced their July estimate for 2023/24 U.S. ending stocks to 300 million bushels, 50 million lower than last month. The U.S. season-average soybean price for 2023/24 is forecast at $12.40 per bushel, up $0.30 from last month. The soybean meal price is projected at $375.00...
WASDE Corn
Corn: USDA increased their July estimate for 2023/24 U.S. ending stocks to 2,262 million bushels. The season-average farm price received by producers is unchanged at $4.80 per bushel. Foreign corn ending stocks are virtually unchanged relative to last month. Global corn stocks are up 0.1...
WASDE Wheat
Wheat: USDA increased their July estimate for 2023/24 U.S. ending stocks to 592 million bushels, 30 million higher than last month. Winter wheat production is forecast to be higher on larger harvested area and increased yields. The projected season-average farm price is forecast at $7.50 per bu...
Market Commentary: Pre-WASDE Short Covering Lifts Corn, Soybeans; Wheat Lower on Weak Demand
The CBOT was mixed to start the week with all eyes now solidly focused on Wednesday’s WASDE report. Corn and soybeans strengthened in early trade due to weekend rains that missed the western Corn Belt and northern Plains as well as short covering heading into the WASDE report. Wheat futur...
Mercosur Regional Analysis
Wheat This week Argentina saw low intensity rains, but they again fell on areas that at this moment do not have any need of the moisture. On the other hand, the western portion of the agricultural area and a large part of the nucleus region continue to suffer with no rain. Many farmers have alr...
Atypical BSE and the WOAH; What Will China Do?
The World Organization for Animal Health (WOAH) announced last month that it has removed atypical bovine spongiform encephalopathy (BSE) from the list of animal diseases that require compulsory notification. As WPI covered in May, A 5-year-old cow in South Carolina was discovered to...
Black Sea Regional Analysis
Russian Grain Markets: 26–30 June 2023 Russian Grain Union is estimating the Russian grain crop at 130-140 MMT and export potential at 55 MMT. The Union is not expecting a record crop again and is estimating a 10 percent decline. A pessimistic scenario discussed by some domestic ana...
Mercosur Regional Analysis
Wheat Argentina’s wheat sowing is progressing at a good pace thanks to favourable weather conditions, and with a weekly progress of almost 14 percent, 71 percent of the expected area has been sown. There are still areas with virtually no moisture reserves (see map below with the areas of...
Market Commentary: EPA Volumes Sink Soyoil; Grains Rally on Crop Conditions
Just one day after this analyst wrote that grain futures were likely to take a break from their rally amid overbought technical conditions, futures extended their rallies based on worsening U.S. crop conditions. The USDA’s crop conditions data yesterday was bullish corn, soybeans, and spr...
China In-Country Analysis
We regret to inform subscribers that WPI's analyst in China is currently ill and thus there is no report this week. ...
Market Commentary: Lack of Rain Driving Out Shorts
Note: WPI chief market analyst Matt Herrington is away on travel until 20 June. Agricultural commodity futures continue to be driven by the El Nino advisory and its associated weather. While some parts of the Corn Belt received some moisture this past weekend, too many areas were missed...
WASDE Soybeans
USDA’s projection for U.S. soybeans is for 2023/24 ending stocks of 350 million bushels, up 15 million from 2022/23. Global 2023/24 ending stocks are increased 0.8 million tons to 123.3 million with higher stocks for the United States, Brazil, and the EU being partly offset by lower stock...
WASDE Corn
USDA’s projection for U.S. corn is for increases to both beginning and ending stocks: U.S. exports are lowered 50 million bushels and ending stocks are raised 35 million bushels to 2,257 - this is well above the 2022/23 ending stocks of 1,452 million bushel. The season-average farm price...
WASDE Wheat
USDA’s projection for U.S wheat in the current 2023/24 season is total U.S. wheat production of 1,665 million bushels. This is a production level that is similar to the prior 2022/23 season's production of 1,650 and similar to the 2021/22 level of 1,646 million bushels. U.S. ending...
China In-Country Analysis
Macroeconomics Food Inflation Soars to 1 Percent in May After seeing food prices rise by just .4 percent in April, May saw a sharp rebound driven by the cost of cooking oils, fresh fruit, and milk. May also marked the fourteenth consecutive month that the cost of food has risen year-on-year. Th...