By: Dan Hueber –
Corn futures swooned a little bit last night in response to the improvement in the state by state crop ratings but has since been able to pop back into positive territory. As you have most likely seen, ratings for the top 18-sates saw the good to excellent category improve 3% to 68% and the poor/very poor improved 1% to 6%. While I guess you could say this would be a normal reaction, it made my stomach churn just a little bit at the thought that we will have a market that throughout that growing, there will be reacting to each and every tweak in condition ranking, regardless if they truly mean anything or not. Such may be the life in the “new” era of markets analysis and trade.
Harvest in South America moves on with Argentine beans now estimated to be 85.5% complete, which was up 6% for the week. Corn harvest moved ahead by 2.4% and now stands at 38.4%. Dr. Cordonnier left his estimates unchanged for both crops projecting beans at 56.5 MMT and corn at 39 MMT. Further north in Brazil, the safrinha corn harvest is getting underway and is estimated to be between 1 and 2% harvested.
Reuters has now released survey estimates for this Friday’s report which breakdown as follows; 2016/17 ending stocks for corn at 2.287 billion, beans at 433 million and wheat at 1.161 billion. For 2017/18 average estimates were 2.085 for corn, 485 million beans and 911 million for wheat. The average estimate for all wheat is 1.815 billion, and for all winter wheat at 1.239 billion. Looking at South America, the average estimate for Brazilian beans are 112.24 MMT and corn at 96.48 and Argentina beans at 57.40 MMT and 40.29 for corn. Last but not least, the world ending stocks estimates for 2016/17 came in at 224 MMT for corn, 90.79 MMT beans and 255.24 for wheat. Then for 2017/18, we have corn ending stock estimated at 195.48 MMT, 89.44 MMT beans, and 257.77 wheat.
It would appear that Bunge is none too excited about the prospects of “hooking up” with Glencore. They have stated that they are not in any kind of “business combinations” discussions with Glencore but obviously are a bit concerned about a possible hostile takeover bid by that firm as they have hired JP Morgan and the legal firm Shearman & Sterling to develop a defense against such a maneuver. When asked if they would pursue a hostile takeover, CEO of Glencore Ivan Glasenberg would only comment that the company was “keen to grow its agricultural unit and that Bunge would be a good fit for its business.” I am sure this will not be the last of what we hear about these two firms during the next several months.