The market is holding its breath as it eagerly awaits the release of the first USDA report in over 40 days. The US Government shutdown has held up key stocks and trade data, leaving many in the trade relatively blind.
Soybeans are the commodity that is being closely watched. It is caught between underlying yield data, with expectations that a dry finish in the US pulled back yield numbers, and the potential that export data will reveal negligible flash soybean sales to China. Such an outcome would be a blow to the Trump Administration, which has promoted its recent framework agreement as a lifeline for US farmers.
The Commitment of Traders (CoT) will also be scrutinised. The bias of speculators tilting markets one way or another has been a significant drag on futures markets. As happened in previous Government shutdowns, the fund managers and spec crowd have been able to quietly exit positions under the veil of darkness, the lack of trading data afforded them. It will be interesting to see what the CoT reveals once the veil is lifted.
Wheat is managing to hold its head above water despite the signs of a building Southern Hemisphere crop. Argentina’s Rosario Grain Exchange updated its production forecast to 24.5mmt, up 1.5mmt from last month. Better-than-expected yields in the north of the country led to the revision. Wheat at 12% protein is US$210 FOB, making it by far the cheapest in the world. Compare this to US HRW (12% pro) at US$240 FOB, Russian (12.5% pro) at US$230 FOB and Aussie APW (10.5%) at US$252 FOB. Tonight’s USDA report is also thought will increase wheat output in the EU27, Russia and Australia.
The week ahead….
For a market that has been starved of information, tonight’s USDA and WASDE reports will be poured over looking for anything out of the ordinary. It feels like anything less than a ‘surprise’ and the market may default to a bearish interpretation as the weight of rising inventories becomes harder to ignore.
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released its December Crop Report last week, and it came with some serious bumping
Another ‘geopolitic’ type of week, with little fundamental news but lots of political intrigue to keep the market ticking over. News that the US President
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.
Markets on the sidelines ahead of USDA report
Soybeans are the commodity that is being closely watched. It is caught between underlying yield data, with expectations that a dry finish in the US pulled back yield numbers, and the potential that export data will reveal negligible flash soybean sales to China. Such an outcome would be a blow to the Trump Administration, which has promoted its recent framework agreement as a lifeline for US farmers.
The Commitment of Traders (CoT) will also be scrutinised. The bias of speculators tilting markets one way or another has been a significant drag on futures markets. As happened in previous Government shutdowns, the fund managers and spec crowd have been able to quietly exit positions under the veil of darkness, the lack of trading data afforded them. It will be interesting to see what the CoT reveals once the veil is lifted.
Wheat is managing to hold its head above water despite the signs of a building Southern Hemisphere crop. Argentina’s Rosario Grain Exchange updated its production forecast to 24.5mmt, up 1.5mmt from last month. Better-than-expected yields in the north of the country led to the revision. Wheat at 12% protein is US$210 FOB, making it by far the cheapest in the world. Compare this to US HRW (12% pro) at US$240 FOB, Russian (12.5% pro) at US$230 FOB and Aussie APW (10.5%) at US$252 FOB. Tonight’s USDA report is also thought will increase wheat output in the EU27, Russia and Australia.
The week ahead….
For a market that has been starved of information, tonight’s USDA and WASDE reports will be poured over looking for anything out of the ordinary. It feels like anything less than a ‘surprise’ and the market may default to a bearish interpretation as the weight of rising inventories becomes harder to ignore.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: CRM Agri, Reuters, SovEcon, Next Level Grain Marketing, Mecardo
Categories
Have any questions or comments?
A good WA spring driving crop production
The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) released its December Crop Report last week, and it came with some serious bumping
Price pressure as production picks up
A week or so ago, I wrote how ‘big crops get bigger’. True to form, the trend continues. This week, StatsCan updated their production data
A slow harvest and drifting prices
Summer is here, yet it has been hard to find spring heat in the south, let alone summer. Cool, wet conditions continue to delay harvest
Thanksgiving caps a flat week
Another ‘geopolitic’ type of week, with little fundamental news but lots of political intrigue to keep the market ticking over. News that the US President
Want market insights delivered straight to your inbox?
Sign up to the mailing list to get regular updates to new analysis and market outlooks
Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
MEET THE TEAM
Our team of market analysts are recognised as leaders in Australian Ag market analysis, providing invaluable insights to help you navigate the ever-changing commodity landscape.
SERVICES AND CAPABILITIES STATEMENT BROCHURE
We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.