The Hueber Report

It is not that any of the data released yesterday was “in-your-face” bullish, but most numbers, you could at least say, were at least not negative and in the case of beans even “mildly” positive.  While still an increase of 45 million over last month, corn ending stock were 10 million or so below trade expectations at 2.182 billion, and both the Argentine and Brazilian crop estimates were combined, 700 MT below the estimates.  Note that world ending stocks were about that much above estimates but still down 1.4 MMT for the month.  The bean numbers were positive all around as domestic carryout was not only 20 million bushels below the estimates but were reduced 5 million from last month.  Then on the global stage, both Brazilian and Argentina crop were reduced a smidge more than expected and ending stocks came in 2.1 MMT below estimates and 3.6 MMT less than last month. Wheat was once again the exception to the rule as the projected domestic ending stocks of 1.064 billion was 24 million above the trade estimates and 30 million higher than last month.  All that said, it did not take long for all of this to fall into the “old news” categories and the trade began to look for something else for inspiration.

Possibly just as important were reports that President Trump has decided to shelve any reforms on Renewable Fuels Standards for the next few months due to all the uncertainty that has been created concerning the trade feud with China. I suppose this is part of the manner in which farmers will be “protected” as Secretary Perdue promised a few days ago.  While I do not want to read to deeply between the lines, but this would seem to beg the question; does this means that if the trade issues with China are resolved, the RFS be tossed into the den of oil industry wolves as a treat?      

For the second time this week, we find Argentina in as a purchaser of U.S. soybeans, this time booking 120,000 MT for the 2018/19 crop year.  Also reported this morning was a sale of 141,518 MT of beans to Mexico for the 2018/19 crop year as well. Of course, tomorrow morning will bring us the weekly sales data.

When it is all said and done, the grain and soy markets appear nonplused about all the recent news, but I dare say, seems to be acting just a bit weary after the recent strength.  I suspect we have milked about all we can out of the Argentine situation, and yes, planting and domestic weather concerns are just around the corner, but lacking something fresh (and positive) to give the bulls additional nutrition and we may be in line for corrective pressure once again.