Blogging by the Bushel
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Market Report

Monday May 14th, 2018

July corn closed unchanged at $3.96 ½ and December closed down ¼ at $4.14 ¼. July soybeans closed up 14 ½ at $10.17 ¾ and November closed up 9 at $10.23 ¼. July wheat closed down 7 ½ at $4.91 ¼ and September closed down 7 ¾ at $5.08. Crude oil closed up $.31 at $70.99.

The corn market was quiet today, a statement evidenced by the unchanged close, $.03 intraday range, and below-average volume.  Markets were lower overnight and into the early morning, but found their bearings and flitted within a penny either way of unchanged for the balance of the day. Managed Money traders were viewed small net buyers today, as they tentatively defend a 200,000 plus contract net long in the market.

Crop progress data after the close confirmed more “catch-up” fieldwork by U.S. farmers. The USDA reported 62% of the corn crop is now planted, which is greater than the 59% average analyst guess, and is very nearly caught up with the five year average of 63%. Illinois was the headliner for the “planted” camp, bumping up to 90% complete. Minnesota and South Dakota continued to lag well behind and will be the areas to watch going forward. Just 40% of MN was planted versus 77% last year and 65% average. 21% of South Dakota corn was planted versus 71% last year and 61% average. Five day precip maps suggest Minnesota may get enough of a break from the rain to get stuff planted, but South Dakota could get an inch or better. 6-10 day maps are blessedly dry for the Northern Plains, though the 8-14 day shows some moisture. Temps are expected to be average to above.

Mid-Day Grain Inspections have become “consistently good” of late, a trend we expect to continue well into early summer. US exporters shipped 1.55 MMT of corn. While this was down from the 1.92 mmt shipped last week, it was above the 1.42 mmt shipped in the year ago week. This takes total YTD corn shipments to 34.75 mmt versus 40.77 mmt this time last year. Some of the intraday rebound in the markets was attributed to China. Rumors of a “side deal” between the Trump camp and China sparked ideas of a broader trade deal, but for now, it seems to be isolated just to the issue at hand. That deal is a for a “bailout” of troubled China electronics supplier ZTE for unspecified relief on U.S. ag products (which China needs). Expect more details to filter out overnight, though we note claims of this deal being struck have been slowly walked back into the afternoon.

The soybean market bounced smartly off its initial test of $10.00 in a reversal trade that should help stabilize the slide for the near term. Soybean meal also reversed sharply as deteriorating conditions on Argentina’s unharvested soybean crop (67% harvested as of Thursday) has analysts lowering their Argentine meal production ideas further. Fortunately, Argentina’s weather forecast is entering a drier bias but weeks of persistently wet conditions likely have taken their toll and will be realized in the coming day/weeks. Trade factored heavily in today’s strength both from a decent export inspections report to an increase in rhetoric and speculation on trade negotiations between the US and China. Expect more headline volatility as both side work towards a deal. Nothing positive to report on NAFTA negotiations as Friday’s US deadline for a vote by the current Congress apparently will not be met. The weekly grain inspections totaled 688 mt for beans which surpassed expectations of 550 mt. Soybean planting progress came in at 28% complete vs. 8% last week and 29% this week last year and 26% avg. Soybeans emergence is 10% compared to 7% last year this time.

The wheat complex saw slightly lower price action throughout the night and that trend continued into the day. Friday afternoon’s COT report looked to be the driving force overnight, but rains across the western plains, as well as across Russia and Ukraine may have been just as influential. After a six-week absence, Egypt is back in for wheat. Look for offers to be around $5.00 higher than their previous tender back in late March. Conditions this afternoon came in better than expectations. Spring wheat planting at 58% complete was above expectations as well. The wheat complex continues to search for positive news. State by state wheat condition ratings were out this afternoon. Overall expectations were for conditions to be unchanged to improve slightly week over week. Winter wheat conditions came in at 36% G&E and 36 P&VP vs last week when they were 34% G&E and 37% P&VP. Both HRW and SRW wheat classes saw an uptick of about 1%. Spring wheat planting came in at 58% complete vs 30% last week and the long term avg of 67%.

Anna Kaverman

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