Agriculture Commodities Trade Higher Thursday After Weather Outlook Trends Cooler And Wetter; Export Sales In Line With Expectations

Includes: CORN, SOYB, WEAT
by: Andrei Evbuoma

Corn, wheat, and soybean exports all fall in line with expectations.

Corn and wheat up over 1% as market finds stronger support from weather.

Weather outlook unfavorable for farmers with cooler and wetter pattern on the way.

Weather is playing a more important role as we head deeper into the planting season.

CBOT wheat at a bearish 26-cent premium to KCBT wheat.

Investment Thesis

Upside potential can be applied to the near term with the weather pattern expected to turn cooler and stormier over much of the next couple of weeks.

USDA export sales meet expectations while a cooler and stormier weather pattern support prices

The United States Department of Agriculture (USDA) released its weekly net export sales report Thursday morning.

Corn export sales for the week ending April 18, 2019, came in line with expectations, with 0.780 million tonnes exported. This fell short from the week prior of 0.948 million tones, but in line with analysts' forecast range of 0.6 to 1 million tonnes. Main buyers of corn last week were Japan and Mexico.

Wheat export sales for the week ending April 18, 2019, came in at 0.425 million tonnes, falling in line with analysts' expectation range of 0.2 to 0.45 million tonnes and beating the prior week's report of 0.318 million tonnes. Main buyer of wheat last week was Mexico.

Soybeans export sales for the week ending April 18, 2019, came in at 0.596 million tonnes, also falling in line with traders' forecast range of 0.3 to 0.7 million tonnes. This week's report tops last week's reported export of 0.382 million tonnes. China purchased 212k tonnes of soybeans.

Overall, this week's report was a positive one with no surprises.

The U.S. May corn futures was seen up Thursday morning 0.72% to $3.4850. U.S. May soybean futures was up 0.60% to $8.6012, while U.S. wheat was seen higher 1.07% to 4.3538. For the less volatile, unleveraged Teucrium ETF grain products, the Teucrium Corn ETF (CORN) was seen up 0.81% ($0.12) to $14.99, the Teucrium Soybean Fund (SOYB) up 0.07% ($0.01) to $15.36, and the Teucrium Wheat Fund (WEAT) was up 0.30% ($0.01) to $5.04. Figure 1 below is a price trend chart of the front-month May futures contract for corn over the past seven days.



May Chicago Soft Red Winter Wheat (SRW) futures was seen up 1 cent to $4.394, with May Kansas City Hard Red Winter Wheat (HRW) futures up 0.2 cents to $4.116, resulting in a bearish 28-cent premium of CBOT wheat to KCBT wheat. MGEX's Hard Red Spring Wheat (HRSW) May contract was up $0.05 to $5.082.

On the weather front, the outlook has trended cooler with a more southward intrusion of cool air from Canada into the Lower 48 in the medium range. In conjunction with this cooler change is a frontal boundary or baroclinic zone that will setup over the northern sections of the country allowing for multiple rounds of showers and thunderstorms to parade across a good portion of the corn, wheat, and soybean belts.

Source: NOAA

Source: WeatherBell

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.