The Hueber Report

For fear of jinxing it, I am almost reluctant to say anything, but it feels as if spring may finally be arriving in Northern Illinois. Highs that may push 70 degrees today and then daily highs averaging in the mid-50’s next week look promising and could encourage a few producers to at least apply a bit of nitrogen.  Of course, not all of the upper reaches of this country are quite so fortunate as there are warnings for a potential major winter-like storm, already named Xanto, that is predicted to dump major snow and freezing rain across a wide swath of the Plains States and upper Midwest and eventually New England over the next several days.  My associate Jake Wiener passed along a tweet this morning from Elwynn Taylor of Iowa State that shows at the 4-inch level, soil temperatures in Iowa have not been colder than the current in the past 20-years.  An early spring for many this year will not be, and while that does not assure that we will see lower yields, it would potentially be considered strike one.

Be that as it may, markets do not appear overtly concerned this morning as grains have pushed lower initially, with beans holding rather insignificant strength.  News wise, they have little fresh to work with, at least little that would provide encouragement. The Rosario Grain Exchange lowered their estimate for the Argentine soy crop to 37 MMT, which is down 3 million from their last prediction but that is hardly stunning news at this point.  They believe the bean harvest in that nation is now 28% complete.  Further north, ABIOVE, which is the Brazilian Association of Vegetable Oil Industries bumped their estimate for the bean crop in that nation to 117.4 MMT, which I believe currently places them at the top of the estimates and 2.4 MMT above the estimate this week from Uncle Sam.

As reported earlier this week, China moved forward the auction for government corn stocks, and obviously, it was well received.  They sold 3.3 MMT of the 3.59 MMT (93%) offered and additionally sold 211,268 MT of wheat from inventory, which was 100% of what was offered.   One might suspect that end users in China might believe that one in hand is worth two in the bush in light of the current trade tension between our nations.

It is Thursday so we have the release of weekly export sales, but we find little here encouraging either.  The trade was expecting to see corn sales somewhere between 1 and 1.6 MMT but as it turns out, we sold just 839,900 MT or 33.1 million bushels.  This was the lowest weekly sales number since the first week of January and marks the 4^th week in a row of declining sales.  The top purchases this week were made to Japan at 315.1k MT, followed by Vietnam with 187.2k and then Mexico with 147.4k.  Marketing YTD we now stand at 1.897 billion bushels of 85.3% of the projected 2.225.  We have 21-weeks to go which means we now need to average 15.6 million bushels per week. The trade was anticipating bean sales in the 1.3 to 2 MMT range, and we came in at 1,510,500 MT or 55.5 million.  Certainly, nothing to be ashamed of and this number was 33% above last week and 74% above the 4-week average.  Note as well that sale of 954,000 MT or 35.06 million bushels were logged for the 2018/19 crop year.  Top purchasers for the current were unknown destination with 665.8k MT, China at 254.7k and Egypt with 132.5k. Marketing YTD we have reached 1.947 billion bushels of 94.3% of the target.  With 21-weeks to go, now need to average just 5.6 million bushels per week. Finally, we have wheat, and the trade was expecting to see sales in the 250k to 650k MT range, but we fell well short with just 120,700 MT or 4.4 million bushels.  On the bright side, that was 11% above last week, and there were sales of 68k MT for next crop year recorded.  Regardless, with just 8-weeks left in the year, we need to average 9.8 million per week and the average now for the past four weeks has been just 7.78 million.  Actually, the weekly average since the beginning of the calendar year has been 9.36 million, so this does not appear promising.