The Hueber Report

And if you thought yesterday was quiet, just wait until you see today.  Fresh news is virtually non-existent this morning, and what is out there appears to be little more than someone trying to rehash old stories in an effort to have a little something to talk about.  I guess Secretary of State, Mike Pompeo did make a comment that the President would reject any trade deal with China that was not “perfect”, so there are some who want to read between the lines that means a deal is questionable, but we have heard similar such comments so often, it is amazing anyone takes them to heart.  I suspect the fact that there was a failure to reach an agreement with North Korea last weekend may have set the tone for this.  

Seeing that wheat has been the only true bear market of the three majors, I decided to put together a corn/bean combination chart just to see what it looked like.  As you can see, we have been in a corrective mode for the past 6-weeks or so but realistically, since December these two markets have been contained in a range between 1300 and 1250, and currently, we are much closer to the low end than the upper. I believe this reinforces my belief that we should be looking for lows here in early March and potential then for another rebound as we begin shifting focus to weather and the production of another crop. Heck, we could even push back up to the upper end of the trading range.    

There have been reports that up to 600 to 700k hectares of winter crops in Ukraine have been damaged over the winter months, but the “official” word from the government does not reflect that, at least as of yet.  According to the Ag Ministry, there were 7.6 million hectares planted, which included 6.5 million of wheat and they are expecting one the largest crops in recent years. 

Export sales will be released in tomorrow morning and then, of course, the supply/demand number on Friday.  Here again, are the trade estimates. 2018/19 Domestic corn ending stocks are expected to come in at 1.744 billion bushels, which would be up 9 million from the previous estimate.  For beans, the trade is expecting 903 million, down 7 million from the February figure. Wheat estimates came through at 1.0197, up from 1.010 last month.  The estimate for Brazilian bean production stands at 115.71 MMT, down from 117 last month and corn at 94.63 MMT, up .13.  Argentine beans are expected to come in around 55.26 MMT, versus 55 last month and corn at 45.96 compared to 46 MMT.  Finally, for the world ending stocks, the average estimate for corn is 309.5 MMT, versus 309.8, beans at 106.47 MMT, compared with 106.7 and wheat at 267.58 MMT versus 267.53.  As you can see, the expected changes are rather insignificant, so baring any surprises this should be a non-event.