A combination of events are bringing bearish headwinds to the soybean complex. A market strategist discusses what this means for marketing opportunities and more.
AUDIO: Brian Grossman, Zaner Ag Hedge
The U.S. Department of Agriculture (USDA) on Monday released its weekly Grains Inspected for Export report. Zaner Ag Hedge market strategist Brian Grossman says the report was positive news for the soybean and wheat complexes.
“Soybeans coming in fairly strong (at) 920,000. An impressive number considering I was hoping we’d see 500,000 this week,” Grossman said. “However, corn was a little on the weaker side, coming in just a hair over the 750,000 mark. Like we’ve been talking about, it’s the end of the marketing year, but I would have liked to see a stronger number. Maybe it’s a one off for this kind of week. Keep going with the idea of a one off, wheat coming in strong at 450,000.”
Grossman says the early morning report brought some support to the market. He reported Chicago wheat up 10, Kansas wheat up 9 ¼, Minneapolis wheat up 5 ½ and November soybeans up 5 ½ cents at midday.
Grossman notes the grain markets are also positioning for Hurricane Florence.
“It’s nice to see the markets reacting to weather. But, it seems like more often than not, once the hurricane passes through, the damage is not nearly as bad as what the market was planning for. Given that we have a big WASDE report coming on Wednesday, guys that need to be making sales in soybeans may want to take advantage of this little bit of a bump we’re seeing here,” Grossman said.
The U.S. Department of Agriculture plans to release its World Agricultural Supply and Demand Estimates at 11 a.m. Central Time (CT) on Wednesday. The average trade estimate for soybean carryout is 830 million bushels. Grossman says large soybean stocks a top of a uneasy trade war paints a difficult long-term outlook.
“The trade war – it’s very hard to determine how long that is going to drag out, or potentially get worse. There is another line of tariffs that are ready to go on,” Grossman said. ”I don’t know if the market is already assuming that they will go on or not, but with that amount of bearishness coming at us here in the short-term, the longer term looks like we’re going to have a battle.”