3 Big Things Today, February 19
1. Wheat Futures Decline on Demand Concerns
Wheat futures were lower in overnight trading on demand concerns after the three-day weekend, while corn and beans were little changed.
European Union wheat growers have reportedly been trying to undercut competitors by reducing the price of their grain amid slack demand for the grain from major importers, according to consultancy UkrAgroConsult.
Prices for wheat from the EU have fallen from $6 to $8 a metric ton in the past month, the consultant said.
About 85% of the French crop is in good or excellent condition, up from 84% at this time last year, according to FranceAgriMer.
Prices are declining despite a report from the Australian Bureau of Agricultural and Resource Economics and Sciences that said output in the nation dropped to the lowest level in 11 years.
Wheat for March delivery fell 3¾¢ to $5.00½ a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 2½¢ to $4.74 a bushel.
Corn rose ¼¢ to $3.75 a bushel in Chicago.
Soybeans for March delivery fell ¼¢ to $9.07¼ a bushel overnight. Soy meal lost 10¢ to $306.40 a short ton, and soy oil gained 0.02¢ to 29.97¢ a pound.
2. Corn Growers Expected to Bump Acreage This Year, University of Illinois Economist Says
U.S. corn growers likely will plant about 91.7 million acres with corn this year, an increase from 89.1 million last year, University of Illinois Economist Todd Hubbs said in a report on Tuesday.
Corn prices since the release of the February World Agricultural Supply and Demand Estimates (WASDE) Report earlier this month have been relatively flat, which can be partly attributed to expectations for increased acreage, he said.
The closing futures price of corn on February 14 was $3.81 a bushel, which indicates a stocks-to-use ratio of 11% for the 2019-2020 marketing year, using average consumption over the past five years.
“By assuming the same total use next marketing year, a stocks-to-use ratio of 11% infers ending stocks for the 2019-2020 marketing year at 1.635 billion bushels,” Hubbs said in his report. “If the current projection for this year’s ending stocks of 1.735 billion bushels is correct and imports total 40 million bushels during 2019-2020, the corn crop implied by the current market price equals 14.725 billion bushels, 305 million bushels larger than the 2018 crop.”
The linear trend for yield is 174.6 bushels an acre, which using an implied harvest value of 14.725 billion bushel would put harvested acreage at 84.3 million acres, he said. Planted acreage average 7.4 million acres above harvested acreage in the past five years.
Add the implied harvested acreage of 84.3 million and the 7.4 million acres of average disappearance and the projection of corn planted acreage in 2019 is at 91.7 million, Hubbs said.
The USDA will release its March Prospective Plantings Report on March 29, which provides the first formal indication of 2019 spring crop acreage.
3. Adverse Winter Weather Hitting Much of Central U.S. as 8 Inches of Snow Expected in Some Areas
Much of the central U.S. stretching from eastern Colorado to the Atlantic Ocean are under some sort of winter storm watch or warning this morning.
The worst of the weather looks to be in parts of eastern Nebraska, almost all of Iowa, southern Minnesota, and western Wisconsin, according to the National Weather Service.
In Iowa, another round of winter storms is hitting the state as snow is forecast to develop this afternoon. The precipitation is expected to fall at a rapid pace throughout the evening and into Wednesday, the NWS said in a report early this morning.
Accumulations will total up to 8 inches on top of what has already fallen, the agency said.
In parts of Minnesota and Wisconsin, snowfall totals may hit another 9 inches during this latest round of winter weather. Travel is expected to be “very difficult.”