The Hueber Report

While we do have beans attempting to extend the Monday gains this morning, the rest of the complex and the grains are taking a pre-report breather.  Speculative funds were buyers everywhere but oil yesterday, and it is mildly impressive that we have witnessed this type of rebound strength in face of the Chinese tariff spat and a report, but now the question that begs to be asked is; what can we do for the second act?

We did see the first nationwide update for corn planting yesterday afternoon which told us that in the major producing states, planting stands at 2%, compared with the 5-year average of 2%.  As expected to lead the charge is Texas with 58% planted compared with 51% on average, with North Carolina at 13% versus the normal 11%. Kansas was actually 5% behind average at 2% complete.  As the police might say at an accident scene, “move along, there is nothing to see here.”  The overall condition of the winter wheat crop slipped backward.  Good/Excellent now stands at 30%, down 2%, fair slipped 3% to 35%, which means the poor/very poor category had to increase 5% and is now at 35%.  The wheat markets were the big movers and shakers yesterday but, much of the strength was inspired by anticipation of this and this morning we have the inevitable letdown after the news. 

CONAB released updates for Brazilian production this morning and now is projecting bean production of 114.96 MMT, which is up 1.94 MMT from their previous estimate and a total corn crop of 88.61 MMT, up 1.33 MMT from last month.  Dr. Cordonnier, who remain in Brazil on a crop tour, has left his estimates unchanged at 115 MMT for beans and 86 MMT for corn but commented that much of what he has surveyed looks good and has a neutral to higher bias moving forward.  That is not the case for his Argentine estimates though as he lowered his bean estimate another million tonnes to 39 MMT, left corn unchanged at 32 MMT but in each case, states that he holds a neutral lower bias moving ahead. Do note that last month the USDA placed the Brazilian corn crop at 94.5 MMT, and while that was a slight reduction from the previous month, is 7 to 8% above these two private estimates. 

One last time, we are estimates for the report to be issued later this morning.  Domestically the trade is looking for corn ending stocks of 2.189 billion, beans ay 574 million and wheat at 1.036 billion.  On the world ledger, corn ending stocks are expected to total 197.29 MMT, beans 92.95 MMT and what 268.16 MMT.  For the South American production number, the average estimate for Argentine beans is 42.66 MMT, corn at 33.74 MMT and for Brazil, the bean estimate is 115.25 MMT and corn at 92.71 MMT.

Last but certainly not least, there was a nice lineup of export sales announced again this morning.  120,000 MT of beans were sold to Argentina for the 18/19 marketing year. Obviously, the poor crop is leaving processors short inventory. There were 132,000 MT of beans were sold to China also for the 18/19 marketing year and 279,000 MT of beans were sold to unknown destinations for the current crop year.