USDA uncertainty with government shutdown
Every year, the U.S. Department of Agriculture holds some very important data for the market in the January report. Not only is the World Agriculture Supply and Demand Estimates Report released, but also the winter wheat planted area data along with the Quarterly Grain Stocks Report. All of these hold key data for price discovery. But with the USDA currently shut down, the data will likely not be released on schedule. These reports are all to come out on Friday, Jan. 11. But even with a deal to reopen the government, these reports will likely be delayed as the data will have to be prepared.
Here are some of the key items that the market will be looking for if and when the reports are released by the USDA. First off, final production of spring crops like corn and soybeans will be reported. This holds both yield and harvested area. And given the rainy weather during harvest it could very well be expected for production to drop off from the most recent data in December. Next is the winter wheat seedings. Also impacted by poor weather in the fall, look for smaller acreage for winter wheat than initially forecasted. Lastly, quarterly grain stocks will be released, showing what is on hand of major crops. Given lack of regular data (particularly for exports) from the USDA during the shutdown, following demand trends has been difficult.
Wheat markets have been firmer from a recent low. Prices in the U.S. are more competitive with other exporting countries. As mentioned previously, there has not been good data on weekly export sales to see if the U.S. is finally selling more wheat given tighter stocks in Russia, Ukraine, the EU, etc. But, pricing suggests more business has come to the U.S.
Durum prices have held steady. For several weeks, the Minneapolis durum quote has held steady with little excitement expected into the spring.
The canola market has come up modestly, following the path of the soybean oil market. Prices have been supported by good biodiesel demand. India also eliminated some trade barriers that opened up their market for palm oil imports. This has been supportive to oils markets. On the bearish side for canola, the possibility of China's return to buying soybeans could limit canola demand in the months ahead.
Peas and lentils
In an opposite move for oil, India's government has held up and extended restrictions on pulse imports. This will continue to limit demand for pulses produced in Canada and export demand will suffer.
Little excitement for the mustard seed market, with traders in holiday mode. Look for some renewed interest in the coming weeks.