The US weather pattern is still too cold across the Eastern Corn Belt, but elsewhere conditions will be very close to normal. Wheat’s ongoing correction is not helpful in finding summer feed consumption, and some position squaring is noted ahead of Wednesday’s USDA May report – in which the trade expects a very modest decline in 17/18 US corn end stocks. Corn just lacks a bull or bear story!
US seeding reached 47% complete, vs. 52% on average since 2012, and states most behind include; MI, MN, WI and the Dakotas – where it’s been temps more than precip delaying fieldwork. Progress as of next Sunday should reach 64-72% complete, which is still slightly behind average but eases fears of meaningful yield loss due to planting dates. S American cash offers are still $.10-.20/Bu below US Gulf premiums beyond June, there are hints of abnormal rainfall impacting Brazil in the second half of May, and coming rainfall will help Black Sea wheat yield potential.
ARC cautions against chasing any break below $3.60 basis July, and instead expects range-bound trade to continue. Key will be the USDA’s idea major exporters’ stocks/use in 17/18. Await summer weather scares to advance sales. Funds are too short for a lasting decline with 50% of the crop in the bag. Spot corn should trade a $3.60-3.85 range.
