Grains –
Export sales are out this morning before the more important USDA reports later in the afternoon. Here are expectations:
Corn 450-900
Soybeans 400-800
Soymeal 40-160
Soyoil 5-30
Wheat 150-300
As you can see, expectations are down from what we’ve been used to. This seems pretty reasonable as demand is shifting elsewhere on beans and I wouldn’t be shocked to see sales come on the low end of the range. Corn sales are always tricky to guess, but the above range seems like a good enough effort for me. Recall we had 100k mt of wheat flash sales reported, so I wouldn’t be shocked to see wheat sales come in above the expected range.
One more note on bean sales, recall inspections on Monday showed shipments to Netherlands and Belgium when there were no prior sales on the books. This will likely be switched from unknown sales on today’s report. Please don’t be “that guy” who calls this cancellations of unknown sales.
One of the key numbers to watch today will be the USDA’s winter wheat area projection. To the best of my knowledge there isn’t a solid price-measured way of forecasting today’s wheat area estimate, at least nothing I’ve found yet. Instead, the best way I’ve found to look towards today’s number is simply to “take the under” vs. the average guess. As the chart shows here, the actual winter wheat planting figure very consistently comes in below expectations in January. Admittedly, this isn’t a highly “scientific” thought process, but as shown it does have some merit. You’ll see from the attached breakdown of expectations that HRW area is expected down roughly 1.3 million and SRW is expected down 0.4 million. Despite the fact that I believe overall wheat area might have some downside vs. the average guess, I will say I think there is some possible upside risk to that SRW figure as 2016’s final planted area figure was reduced due to issues with prevent-plant. This does give some reason for pause against assuming the “automatic” miss vs. the average guess.
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