The Hueber Report

The March supply/demand report is now but a distant memory.  The numbers themselves did not produce anything shocking, but nevertheless, all leaned to the negative side, providing the bears with enough ammunition to drive grain and soy prices into lower lows before finishing the week.  It should be noted that speculative funds have been steadily piling on short positions in corn and wheat for weeks and while there would seem to be nothing in the news that would shake them from this mindset just yet, the fact that we are moving into a new growing season with much uncertainty ahead could suggest there are nearing the end of the line.  

We have been greeted in this new week with confirmation of additional bean purchasing by China as the USDA announced a sale of 926,000 MT to them for this marketing year. While it is nice to be able to make this official, seeing that the market has been expecting it, there was no real reaction.  The only update I have seen this morning concerning the trade negotiations is that supposedly China has agreed to stay not engage in currency manipulation, which has been one of the U.S. demands.  Hopefully, that brings us closer to a final agreement, and if you believe that China will adhere to that once an agreement is finalized, I have a bridge for sale in Brooklyn that I would like to talk with you about. 

There was another interesting story out of China this morning and is the type the can strike fear into the leadership of that country; Food inflation and in this case, particularly pork. With the ongoing problems that have struggled with concerning African Swine Fever one has to expect that would ultimately filter down (or up) to the price of pork and indeed it has.  As of today, hog prices are at the highest level they have been in 14 months and have jumped over 40% in just the last month. While this may now have trickled down to the retail level just yet, it would seem inevitable.  So far this appears to have only been a boon to hog operations that have not experienced significant death losses, but one has to believe it moves us one step closer to opening the door for more U.S. exports. 

From the sounds of it, the traffic backup on BR-163 in Brazil was short-lived and moving along once again. According to Safras Mercado, harvest in that nation is now 52.1% complete, which compares with last year at 45.7% and the 5-year average of 46.4%.  They appear to be much more precise with estimates (oxymoron) than we here in the United States.  

We now have the combination corn/wheat/bean chart closing in on the lows we posted last summer/fall.  I would point out that it was around a year ago at this time that we were at basically what would become the highs for 2018.  Ideally, we are looking at the exact opposite scenario this year.