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2. Grains and Oilseeds Market Outlook 2020

Finding opportunities in the midst of Mayhem. Stephen Kells, Producer/Grain Market Analyst

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2. Grains and Oilseeds Market Outlook 2020

  1. 1. Finding Marketing Opportunities Stephen Kell |
  2. 2. Comparing US Corn To Prior Years
  3. 3. Where Is The US Corn?
  4. 4. American Corn Production
  5. 5. Ontario Corn Production Crop Unit Nov.2019 Change From Last Year Corn Harvested Mil. acres 1.8 -6% Yield Bu/ac 155 -28 Production Million MT 7.09 -1.78
  6. 6. The “Shape” of the Corn Market
  7. 7. The “Shape” of the Corn Market
  8. 8. The “Shape” of the Corn Market
  9. 9. What’s Going To Drive ‘20 Corn Markets?  The current estimates for 2020 corn production in the US are the biggest since 2016. (94.1 million acres)  Corn futures are likely to trade the expectation of a big corn crop in the year ahead until, (or unless), something happens to change it.
  10. 10. USDA - Soybeans
  11. 11. Export Values Set Our Price Typical Ontario Production 3 million acres at 50bu/ac 4 million NT Imports from US Nearby US supply into Ontario crush 0.3 million MT Food Grade & Non-GMO 25% to 28% of total acres 1 million MT Domestic Crush Bunge Hamilton & ADM Windsor 1.1 million MT Exportable Surplus 2.2 million MT
  12. 12. Comparing US Soybeans To Prior Years
  13. 13. Who To Watch In Soybean Markets
  14. 14. South American Soybean Production Surging
  15. 15. Global Soybean Usage May Exceed Supply
  16. 16. Canadian Canola Supply & Demand
  17. 17. Predicting Canola Prices
  18. 18. South American Soybean Prices  Brazilian soybeans are worth more than their American competition.  Ontario’s values are very closely correlatedwith prices in the US Gulf.
  19. 19. U.S. : China Trade  Nearly 50% of the global soybean supply is consumed in China.  American soybeans currently face a 25% tariff in order to enter China.  It is factually incorrect that China will “have to” buy U.S. soybeans.  Dead Pigs don’t eat. When 85 – 90 million hogs die from ASF, it reduces soymeal demand, and therefore the need to purchase soybeans.  Enormous market volatility created by one twitter user. Can we capture those gains?
  20. 20. Our Portion of the Wheat Market  “wheat” news sometimes has too great of impact on cash bids.  Only about 12% of NorthAmerica’s wheat is soft red, and although traders often “cross hedge” between classes, end users are pretty limited in their ability to substitute classes.
  21. 21. Ontario Soft Wheat
  22. 22. US Soft Red Wheat – Declining Supply
  23. 23. Wheat Pricing Considerations  In Ontario, soft red wheat and corn prices always reach the same level (in $’s per tonne), in August / September.  The carry has completely gone out of wheat futures. It’s primarily the result of increased demand for soft wheat pulling stocks out of storage. Longer term it’s useful for wheat producers because those burdensome stocks are no longer weighing on the market.
  24. 24. What About Australia?
  25. 25. Questions?