Morning Grain Comments, 02/18/2016

Thursday, February 18, 2016

Corn & beans have had a strong run through chart resistance this week but are resting on their laurels a bit atop those ranges this morning; corn trade volume was massive overnight but it hasn't resulted in much excitement. The trade will be interested to see if the “rally” continues; the dollar is stronger again today but hasn't had a negative effect on the grains as of late.

Private consultancy Strategie Grains increased their European Union 2016/17 soft wheat export estimate by 1.7 MMT, to 30.6 MMT—that’s now up from 28.3 MMT this season. They expect a shorter supply from Ukraine and the Black Sea, with less competition from other major suppliers as well. That current ‘15/16 export estimate was also raised by 200k tonnes to 28.3 MMT. Ending stocks were pegged at 13.3 MMT for ‘16/17, down from 17.2 MMT in ‘15/16. Production-wise, Strategie sees the Union’s current winter wheat crops in mostly good condition across the region, with winterkill only expected in minor output areas; nevertheless, they cut their 2016 soft wheat crop estimate from 143.1 to 142.6 MMT this month—that’s down from the record 150.2 MMT harvest last season. Corn output fell from 64.6 to 63.9 MMT this month, still up 11% from last year’s drought-reduced 57.6 MMT, with barley up slightly this month to 60.2 MMT, still down 1% from the 2015 crop.

France AgriMer raised their total French soft wheat carryout estimate by 200k tonnes to 6.0 MMT for 2015/16, the largest in 17 years; exports outside the E.U. were cut by 300k tonnes this month to 11.0 MMT. Corn ending stocks were cut from 2.9 to 2.7 MMT, with barley down from 2.1 to 1.75 MMT.

Cargill announced yesterday that they will stop selling seeds, fertilizer, and chemicals to farmers in the Black Sea region, winding down their crop input business immediately and completely exiting the business by May.

Traders are expecting tomorrow’s USDA Cattle on Feed Report to show all U.S. cattle as of February 1 at 99.9% of last year, or 10.699 million head; trade estimates ranged from 99.2-102.2%. January cattle placements are seen
at 99.0% of last year, with marketings at 98.4% of last January.


Today’s chart shows Texas corn planting progress, from next week’s comparable dates onward; planting is reported as underway in areas of TX (including the Lower Valley, Coastal Bend, and South Central) and the state NASS office is expected to report some progress on Monday, which will compare to a five-year average of 4% complete on that date. TX planting averages 50% by the end of March; the state consistently produces just 2% of the U.S. crop annually.



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