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Market Report

Monday April 16th, 2018

May 17 corn closed down 3 ¾ at $3.82 ½ and July 18 closed down 3 ½ at $3.91. May soybeans closed down 12 ¼ at $10.42 and July closed down 11 ¾ at $10.53 ¼. May wheat closed down 10 ¼ at $4.62 ¼ and July 18 closed down 10 ¼ at $4.79. Crude oil closed down $1.13 at $66.20.

The corn market picked up right where we left off Friday, finishing lower. Markets were weak overnight and maintained a defensive tone throughout the day, no doubt heavily influenced by double-digit declines in wheat. Futures have now corrected a $.10 off the most recent April 9th high. Managed Money traders were viewed net sellers of 15,000 corn today, which would leave them net long 180,000 futures and options. Grain inspections remained a bullish highlight in an otherwise quiet day for corn news. For the week ended 4/12, U.S. exporters shipped 1.5 mmt of corn, which was down from last week’s dominant 1.94 mmt tally, but above the year ago week’s 1.34 mmt.  This takes total YTD corn shipments for 17/18 to 28.0 mmt (1.1 BB) vs. 35.9 mmt (1.4 BB) at this period in 16/17.

The USDA told us what we already knew after the close. There was very little corn planting progress achieved last week. National corn planting progress was pegged at just 3% complete, which compares to 6% average and 2% last week. Only three states, Texas, North Carolina, and Tennessee registered progress above 10%. This did not seem to excite the markets too much today, likely because better weather is in the forecast beginning this weekend. There is less precip in the mix Fri-Sun, and temps are expected to warm although stay slightly below normal. In South America, harvest disruptions could occur in Argentina given a rainier outlook. Brazil could use more rain in southern growing areas, and this could be a bigger deal as we get into pollination next month. Argentina’s first crop corn is over 25% harvested, Brazil first crop corn is closing in on 80% harvested, and second crop corn has been completely planted.

The Soybean market traded slightly better in the overnight but for a second consecutive session, in the absence of fresh export sales confirmations, we were unable to hold strength and reversed lower. Weather is far from ideal but the forecasts suggest an improving trend as we head into the second half of April. Price relationships do support additional bean acres but don’t fall for the almost annual ‘we won’t get corn in the ground’ hype. Weekly soybean inspections totaled 445 mt slightly above the 430 mt trade estimate. Total shipments to date stand at 42.350 mmt vs. 48.296 mmt this time last year representing a 218 mb deficit to last year’s pace. Keep in mind the recent export activity will increase shipments over the coming months and help to narrow that gap some. In the breakdown, China was the destination for only 33 tmt. Elsewhere in the news, Argentina’s national food health and quality service is looking at regulatory requirements including genetics and sanitary protocals to help open up imports of US soybeans.

The wheat complex started the evening around a nickel lower and trade never really looked back. The funds did not seem to have any intentions on waiting to see what the condition reports this afternoon were going to say. They seemed to have just looked at the rains forecast into the dry areas of the HRW wheat belt later this week and looked at the gap lower start and said it was a time to alleviate some of its long position. Condition reports this afternoon had almost every important HRW wheat state falling. Almost all of the northern white wheat states along with most SRW states saw conditions improve slightly. It will be an important day for the wheat complex Tuesday. State by state wheat condition ratings were out this afternoon. Expectations were for conditions to be mainly unchanged from the week prior and they were. Winter wheat conditions came in at 31% G&E and 37% P&VP vs last week’s data of 30% G&E and 35% P&VP. Every HRW wheat state saw conditions fall. Spring wheat planting came in at 3% complete vs 2% last week.

Anna Kaverman

anna@mercerlandmark.com

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