- Chicago wheat December contract down 25.25 cents per bushel to 476.25
- Kansas wheat December contract down 24.5c to 409c,
- Minneapolis wheat December contract down 8.75c to 522c,
- MATIF wheat December contract up €3.25 per tonne to €172.50;
- Corn December contract down 25c to 392.75;
- Soybeans November contract down 12.5c to 879.25c;
- Winnipeg canola November contract down C$1.70 to $452.40;
- MATIF rapeseed November contract down €0.75 at €373.50;
- Brent crude October contract up $0.04 per barrel to $58.57;
- Dow Jones down 389.73 points to 25,897.71;
- AUD weakened to US$0.6763
- CAD weakened to $1.3239
- EUR weakened to $1.1200
A miss – that’s the summary. The trade’s ideas of the damage caused by the unprecedented wet conditions through the row crop planting window were debunked last night by the USDA. In their August report they clearly showed that the US corn grower was going to plant way more corn than anyone could fathom. So a few important things to note. To calculate the planting intentions you have to add the prevent plant acres = 11.21 million acres (ie the acres that have been claimed on insurance that couldn’t be planted due to it being too wet) + the actual planted acres released by the USDA last night = 90 million acres – this means the grower actually was going to put in 101.2m/acs of corn this year. Wow. That would have been amazing, especially given corn was trading at mid $3/bu when growers would have been ordering seed. The other baffling data point put up in last night’s report was the divergence between the USDA and the Farm Service Agency (FSA). Essentially there are 2 different figures released by 2 different govt agencies. The FSA suggested that there was only 85.87m/ac planted vs USDA at 90m/ac. Yes, they have different methodology behind the numbers – the FSA relies on self-reporting from growers which historically means that the number tends to increase over time – but not to the tune of 4.13m/acs. The USDA number utilises a few different tools such as satellite imagery and grower surveys. The divergence between these numbers raises some questions that will drive market direction – but clearly the USDA release in isolation was nothing short of bearish.
Australia wants rain
Markets still remain subdued here in Australia, wide bid/offer spreads. As we now push through middle of August with the forecast still remaining dry for NSW, we will be keeping a close eye on WA as the next 12-14 days will be crucial. It must be said while SA and VIC have had good early August rainfall, crops will still be needing a drink in September to get home with kind temps.
Source: Lachstock Consulting
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