Headlines:

  • The next USDA supply and demand report is on March 9th, 2017.
  • World wheat output to fall for first time in five years, says UN
    World wheat production will fall for the first time in five years, despite a fresh record harvest in Russia, the United Nations said, as it said that recovering values of the grain had fueled a rise in food prices to a two-year high. The UN food agency, the Food and Agriculture Organization, in its first forecasts for world wheat output in 2017-18 pegged it at 744.5m tonnes. That would represent a fall of 13.5m tonnes year on year, the first decline in output since 2012-13, although is a figure more optimistic than the 735m-tonne harvest predicted by the International Grains Council last week. Canada’s farm ministry has also forecast a 735m-tonne world harvest next season.
  • European wheat production to bounce back next season, officials say
    EU wheat production will rise by 6.5% next season, as yields return to normal after last year’s disappointing harvest. The European Commission pegged its first forecast usable soft wheat production in the European Union in 2017-18 at 143.0m tonnes in 2017-18. This would be an increase of 6.5% from the current season, although some 800,000 tonnes behind early estimates from Strategie Grain. The increase in productions was primarily down to a bounce back in the French cereal crop, up some 26% from last year, when wet and cloudy conditions hit wheat production hard. The European Commission said its production numbers were based on a return to trend yields.  Cereal production was also seen rising in Germany and Poland, staying largely flat in the UK, and falling In Italy, Spain, and Hungary.

Summary:

The money flow has shifted to the downside and there were not rumors circulating to hold things afloat. Diminishing expectations that any material changes to the Renewable Fuels Standards (E-15 Waivers) were forthcoming finally started to take root forcing a reversal of yesterday’s market gains. Grain and Oilseed could not muster the strength to offset the barrage of profit taking. Export sales for the week ending February 23rd was 27.3 million bushels for old crop Corn and 0.8 million bushels for new crop. Soybean export sales were reported at 15.7 million bushels. Wheat sales were reported at 13 million bushels for old crop and 3.6 million for new crop. Mexico was largest buyer of Corn in the most recent report, taking in 10.2 million and 0.3 million for the old new and old crops respectively.

The origin of the said E-15 Waiver rumors finally came to light. The Renewable Fuels Association and billionaire Carl Icahn reportedly presented a proposal to the White House on Tuesday that would potentially increase sales of ethanol while shifting the responsibility of blending away from refiners. Icahn is the majority owner in a refining company and the White House reaffirmed that no executive order is in the works. The chief executive of Poet, the second-biggest ethanol producer in the US, said the RFA doesn’t have negotiating power for the entire industry.