Corn up, watching planting weather
Soybeans were modestly lower on profit taking and technical selling after closing higher for two sessions in a row. The USDA says planting is ahead of average and many analysts expect the planted area total to be larger than originally projected in March, even with probable planting delays in some areas. The USDA’s 2020 planted area totals are out at the end of June. There has more talk of China buying U.S. beans but no sales have been reported this week. The renewed political, economic, and epidemiological tensions between the U.S. and China don’t seem to have much of an impact on trade yet. Beijing has said it will fulfill purchase obligations in Phase One of the trade agreement with the U.S., but has also signaled it wants to renegotiate the pact, which is opposed by Washington D.C. Brazil’s Customs Ministry says soybean exports during the first two weeks of May were 8.8 million tons. Soybean meal was mixed on old crop/new crop spread adjustments, nearby months were down, deferred contracts were up, and bean oil was lower on profit taking.
Corn was modestly higher on short covering and technical buying, with the most active nearby months gaining for the third consecutive session. 80% of the corn crop is planted with several key states close to wrapping up. However, parts of the eastern Corn Belt are expected to see more heavy rain this week, delaying activity. Heavy rain has also been an issue in parts of the northern Midwest and Plains. It’s looking likely U.S. planted area won’t hit the 97 million acres projected earlier this year, the big question is how far short will it fall? Ethanol futures were mixed. The U.S. Energy Information Administration’s weekly ethanol production and stocks numbers are out Wednesday. Production is rebounding as states continue to reopen, but production remains well below a year ago. Livestock feed demand is also a concern. Ukraine’s Ag Ministry says corn exports since the start of the marketing year in July 2019 are 27.5 million tons. The trade is also monitoring harvest activity in Argentina, now around 40% complete, and dry weather potentially impacting Brazil’s second corn crop, the source of most of their exports.
The wheat complex was mixed with Chicago and Minneapolis up and Kansas City down. The USDA’s winter wheat condition rating was down 1% on the week and 19% below a year ago, with soft red winter in better condition than hard red winter. Spring wheat planting and emergence are slower than normal because of heavy rain in the northern U.S. Plains. Most forecasts have a drier, warmer pattern for parts of the European Union and the Black Sea region, limiting yield potential. The European Union’s MARS crop monitoring group lowered its’ soft wheat yield outlook for the E.U. citing recent weather issues. The trade is also monitoring dry conditions in parts of Australia. Ukraine’s Ag Ministry says 2019/20 wheat exports are 19.8 million tons, with cumulative grain sales at a record 52.73 million tons, 17% ahead of the 2018/19 pace.