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Today’s Prices
Grain markets finished mixed today as traders are taking a pause after yesterday’s big rally.
Grain Market News
Canadian Canola
The record all-time price for Canadian canola was $7.54 back in 2008. Prices have gone dramatically above the all-time highs and are still sitting up near the all-time levels.
European Rapeseed
A similar situation in European Rapeseed. The all-time high was between $5.21-$5.26 and our current prices have been well above that level over the past few months as European Rapeseed has posted new all-time highs by a large margin.
World Oilseed Futures
Canola and Rapeseed oil have been rallying to new highs while U.S. soybean oil has not and U.S. soybean oil has become very competitive in the global marketplace for edible oil. This is one of the reasons India has come in for a couple of huge purchases of U.S. soybean oil over the last few weeks.
Palm Oil
Palm oil is no exception. It is not a vegetable oil but it is a tropical or edible oil. The previous all-time high from 2007-2008 at 4,29 and current prices near the all-time record high. Just another example of global prices that are not only soybean oil but soybean prices in the U.S. as well.
Paranagua Soybean FOB Premiums
This chart shows the basis levels for Mar offerings with Apr, May, June shipping exports out of Paranagua, one of the primary export ports out of Brazil. Basis offers out of Brazil back at Christmastime where 30-cents above the CBT. And now they’re trading over 60-cents above and offers for the month of June were 50-cents over the CBT and are now trading 95 cents above. So, South American prices are rallying sharply going into harvest due to the large losses due to drought conditions. This does not guarantee that U.S. prices will rally dramatically but it is certainly a supportive feature especially when you consider the fact we’re going to beginning the South American soybean harvest in the next couple of weeks.
Dalian Corn
This is futures markets for corn in China and prices are rallying to the highest level over the last few months and challenging the all-time highs that were posted last year in the Jan-Jun timeframe. Dalian corn prices hit $11/bu today and definitely makes U.S. corn attractive for imports into China.
Paris Milling Wheat
Paris milling wheat prices are very high. They have fallen back recently, just like the U.S., but prices are still near the all-time high that have been posted over the past 20 years. And with concerns developing regarding the Russia/Ukraine situation and shipments out of the Black Sea, don’t be surprised to see European wheat prices rallying back up towards the recent highs.
Grain Market News
Observed High Temps
Argentina’s growing area saw temperatures mostly in the 80’s although there were some 100’s in the far northeastern area. Those 100 degree temperatures that were centered over Argentina last week have now moved northward into far northern Argentina, Paraguay, and southwestern Brazil. This area is short on soil moisture so temperatures in the 100’s certainly going to be stressful. It was yesterday, is today, and looks like it could be for 2-3 more days in this section while Argentina in general looks for improving conditions.
SA 2-Week Precip Forecast
Over the next 7-8 days there is expected to be significant rainfall in Argentina, 1-3”, 2-4” of rain in the south. Further north in southern Brazil, Paraguay, and Uruguay there will be some rain but it’ll be lighter. Nonetheless, any rain will be welcomed especially in these areas where temperatures have been in the 100’s. The second week of the forecast shows some follow-up rains in Argentina while we could see some pretty solid rains in southern Brazil as well. Overall, the forecast doesn’t look too bad. but the ongoing heat and dryness in some areas of Paraguay and southwestern Brazil still causing crop losses.
Weekly Ethanol Production
U.S. ethanol production expanded nicely up to 1.053 mil barrels/day and that is well above the level needed to reach USDA’s export forecast. And keep in mind, USDA raised its forecast by 75mb of corn use but it looks like it could still be too low by an additional 50-75mb. Ethanol production certainly good news today.
Weekly Stocks of Fuel Ethanol
Stocks of fuel ethanol increased again up to 23.598 mil barrels. Some are looking at this as disappointing or bearish news but we’re only rallying back to where stocks should be with fuel consumption at the level we’re at. Rather than having extremely low stocks, we have much more normal stock levels of fuel ethanol.
March Corn Chart
We had to reconfigure the chart after a short-term downtrend developed for about 3 weeks. We’ve broken through the upside very cleanly and that allows us to draw a new channel formation that has been in place for about the last 3 months. The short-term chart has turned upward. The technicals have turned upward. The next objective would be to challenge and take out the $6.17 highs that were posted about 3 weeks ago.
March Soybean Chart
Soybean prices exploded to the upside yesterday and exploded again today. Prices reached a new high at $14.29 taking out the highs from about 2 weeks ago at $14.15. The chart clearly in an uptrend with new highs being posted today. Techncials have turned upward. The next objective would be the contract highs posted back around the first of June at $14.45. That’s about 20 cents above where we closed today.
March KC Wheat Chart
Wheat prices have also turned into a short-term uptrend recently following 3 days of higher prices. Today’s high earlier this morning at $8.06 was 63 cents above the lows earlier this week. This is a tremendous rally. It puts the short-term trend back up in wheat. The technical indicators pointed upward as well with plenty of room to move if we can get just a little bit more friendly news.
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