Capitol Commodity Hedging Services

Capitol Commodity Hedging Services

  • United States, IN, Indianapolis
#Grain #Futures Comments

-Germany's wheat crop expected to rebound sharply from last year
-US seeking increased wheat exports to Brazil
-Brazil seeking increased meat exports to China
-US corn/spring wheat planting slow but it's still early...

Germany’s association of farm cooperatives sees a nearly 21% increase in the country’s wheat production this year as it recovers from last year’s drought. A wheat crop of 24.4 MMT vs last year’s 20.3 MMT is currently expected. A sharp recovery in corn production is also anticipated to 4.3 MMT from last year’s 3.3 MMT. On the other side of the equation, though, German rapeseed production is expected to decline solidly following the massive 25% reduction in planted area last fall due to the ongoing drought conditions at the time of planting. Current ideas for this year’s German winter rapeseed crop, according to the association, are around 3.24 MMT vs last year’s 3.67 MMT as improved yields will help offset some of the acreage reduction.
* A U.S. delegation of wheat industry officials (US Wheat Associates, Kansas Wheat Commission, among others) is in Brazil this week to gauge the potential for the U.S. to increase wheat exports to Brazil once they open the 750k tonne annual tariff-free import quota Brazilian president Bolsonaro announced during his White House visit in March. However, the quota will be open to other wheat exporting nations, as well. In recent years, the U.S. has exported as little at 121k tonnes of wheat to Brazil to as much as 1.5 MMT depending on their crop size. Record U.S. wheat exports to Brazil were 4.4 MMT in 2013/14 following Argentina’s back to back very poor wheat crops in 2012/13 and 2013/14 which sharply reduced their export availability.
* Chinese and Brazilian officials are set to meet in...

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