** It has been another mixed and low volume morning at CBOT as corn/wheat trade either side of unchanged while soybeans hold in the green on improved US export demand for old crop. The volume totals at midday are slightly improved from Friday and Monday, but still low historically speaking for mid May. This is the time of the year when volume/activity should be gaining ground based on yield risk heading into summer. This year, such risks appear to be diminished and the only selling appears to be in Kansas City wheat where funds continue to exit a stale long position. Our bet is for a mixed CBOT close.
** ARC notes that although much of the US corn crop is planted on a timely basis, there remains a considerable amount of acres that has to be replanted due to reduced stands. Soybeans are able to branch to make up the difference in poor stands, but corn is a different story. Producers and agronomists are trying to make a corn stand assessment to determine whether reseeding should take place? ARC notes that IL reported yesterday that just 42% of their corn is rated GD/EX, down 27% from last year. The corn crop in the flooded areas is not as consistent at the start of the growing cycle. Whether corn can grow out of its ugliness will be watched as national ratings are offered in early June.
** HRW wheat harvest is just getting underway in the Southern Low Plains, the Blacklands, and Trans-Pecos area. Yields are down some 10-35% from last year with most reporting that bushel weights. Its still too early to get a read on protein levels and it will take another week of cutting before a trend can be determined. NASS expected Texas to harvest 69 Mil Bu of winter wheat, down 20% from last year. It’s still early days, but local crop watchers think that Texas will harvest a winter wheat crop of 58-63 Mil Bu, down another 6-11 Mil Bu. Freeze damage should become more noticable as the harvest pushes north. And there conitnues to be a worry about low protein wheat as the crop matured without any heat to push protein levels.
** The USDA announced that 132,000 MTs of US soybeans was sold to an unknown destination in an old crop position. ARC is told that other sales were completed with the total number of cargoes sold equaling 5-6 or 300-360,000 MTs. The US is competitive with Brazilian farmers not willing to sell soy amid low prices and a strengthening real. A new Brazilian presidential election looms and further strength in the real could limit soy seeding in Sept-November. China continues to ask for offers of US PWN soybeans with US 2016/17 exports likely to be increased to 2,070-2,080 Mil Bu. The new export demand helps offset a likely decline of 20-25 Mil Bu in crush.
** US wheat values are quickly becoming competitive in the world marketplace as prices drop. However, few are willing to sell 12% protein plus in the Gulf amid the concern for the crop which is raising HRW cash basis offers.
** Its just going to be cold across the N and C Plains and the NW Midwest from Friday into the closing days of May. Modest warming will only occur in the far west US next week with a NW upper air flow circulating cold air into the Central US. Highs in the N Plains and the NW Midwest will range from the upper 50’s to upper 60’s with lows ranging from the 40’s to lower 50’s.
The cold temps will have some talking corn GDD rates with development retarded into June. Based on the forecast, May of 2017 could end up as being one of the top 10 coldest on record for the Plains, Delta and Midwest!
Rainfall totals for the next 7 days are slightly drier for the E Midwest with moderate to heavy rains to fall across the W Midwest/ C and N Plains.
** AgResource Market Comment: Below to much below normal temps will prevail across the Central US for the next few weeks. A peak in temps will be seen in the next 36 hours with a decline thereafter. The cool to cold and wet Plains weather will add to the disease pressure in winter wheat. Soybeans have a export demand story for now with the US making new sales to China in July and August. And at some point, corn will need heat units for growth!
