The Hueber Report

While it would be premature to read anything into it, but it seems this was the first morning in some time that when I turned on my quote system that I was greeted with red numbers instead of green.  The pressure is by no means significant but seeing we have crossed into a new month, the idea that we could also witness a change in attitude does not seem far-fetched, particularly after seeing the grain and soy markets really accelerate for the final few days of February.  For the record, during that month, spot corn gained 12 ½-cents, spot beans 48 ½-cents and spot wheat 31 ¼-cents.  Not shabby for a month that is often negative. 

As the Argentine weather and now wheat growing concerns have taken center stage and inspired the recent move, other macro factors have been pushed into the wings but should not be completely forgotten as the could yet come back and haunt us.  One of these has been the US Dollar. Towards the end of January, the dollar had reached down to complete a 50% retracement of the entire 2011/2017 price advance as well a major uptrend lines and then began to chop sideways, at least until this week.  While we still have a couple of days of trade left, we are currently sitting just above the highs of the past six weeks and looking very much like a market that wants to confirm a low.  Granted, if the attention of the trade remains focused on Argentina or poor growing conditions for world wheat, the dollar will continue to be ignored, but if they tire of trading the production news, the dollar could become the topic du jour once again.

It is Thursday, so we have weekly export sales and corn has continued its positive streak, beans rebounded quite well, but wheat was a bit sorry.  We might as well begin from the bottom, and we find that for the week ending February 22^nd, we sold just 191,100 MT or 7.02 million bushels of wheat.  This was 42% below both last week and the 4-week average.  The top purchasers were Mexico with 84.9k MT, followed by Yemen with 57k and then Morocco at 30.2k.  Marketing year to date with have now sold a total of 794.92 million bushels (83.7%) out of the 950 million projected by the USDA. We have 14-weeks left in the crop year. It was not challenging to improve on last week’s negative soy sales numbers, and we posted a respectable 857,900 MT or 31.53 million bushels.  The top purchaser was Mexico with 334.5k MT followed by China with 215.6k and then Egypt purchasing 170.1k. Marketing YTD we now stand at 1.674 billion.  This takes us up to 79.7% of the target with 27 weeks to go. I have saved the best for last as we sold 1,753,000 MT or 69.02 million bushels. This number was 13% higher than last week but actually 2% lower than the 4-week average.  Top purchasers were Japan with 514.5k MT followed by Mexico at 217.3k and then Egypt with 170k.  Marketing YTD we have now reached 1.547 billion bushels which is 75.5% of the projection.  With 27 weeks left in the year, we will now need to average 18.63 million each week moving forward. 

Last but not least, today will bring us round two if the oil industry vs. ethanol industry bout at the white house with numerous representatives there to duke it out.  Kind of sounds like the energy version of the apprentice.  Yesterday, Secretary Purdue was here at the Commodity Classis and assured attendees that the President stands with “corn farmers, biofuel farmers, and the RFS.”  More than a few farmers I spoke with yesterday were wondering exactly what that means, and I suspect we will soon find out.