-Brazilian soybean crop idea ticked higher, exports lowered
-Canada March 31 wheat stocks as expected, canola stocks slightly lower than expected
-Longer-term weather ideas remain improved
-Chinese trade talks remain heavy focus
-Trade estimate summary for Friday USDA reports
USDA will release the monthly WASDE and Crop Production reports on Friday. This month’s reports will include their first official estimates of 2019/20 balance sheets, along with the first objective estimate of U.S. winter wheat crop. A summary of trade estimates is on the following page.
President Trump’s renewed hardline stance regarding China over the weekend in threatening to raise tariffs on Friday and put additional tariffs on a new list of products was apparently spurred by an apparent shifting of the tone of the trade talks of late highlighted by recent comments by USTR Lighthizer indicating there has been “an erosion in the commitments from China,” “China was reneging on commitments,” and “the Chinese have pulled back,” while Treasury Secretary Mnuchin said “China moved away from language in the agreement that would have changed it substantially.” While the Chinese trade delegation reportedly is still making the trip to Washington this week, with the Chinese Vice Premier expected to attend talks Thurs/Fri, there clearly has been a pull back in optimism of a deal coming sooner than later.
Brazilian soybean industry group, Abiove, raised their estimate of Brazil’s soybean crop to 117.6 MMT from 116.9 MMT previously and compares USDA’s 117.0 MMT and their reflection of last year’s crop of 123.1 MMT (USDA 122.0 MMT). Abiove expects a notable decline in Brazilian soybean exports to 68.1 MMT from 83.6 MMT last year (local marketing year Feb-Jan), down from their previous estimate of 70.1 MMT and compares to USDA’s 69.5 MMT. They estimate Brazilian soybean crush this year at 43.2 MMT, unchanged from previous ideas, and little changed from last year’s 43.6 MMT, while USDA is at 42.7 MMT. Ending stocks are expected to rise to 5.6 MMT, recovering from last year’s sharp decline to historically low levels at 2.8 MMT.
Canada released their equivalent of the USDA’s quarterly Grain Stocks report this morning, providing Canadian stocks data as of March 31. All wheat stocks in Canada as of March 31 were reported at 15.694 MMT, right in line with the average trade estimate of 15.7 MMT (14.8-16.3 MMT range of ideas) and compares to 16.394 MMT. March 31 canola stocks were reported at 10.019 MMT vs average expectations of 10.2 MMT (9.8-10.5 MMT range) and last year’s 9.063 MMT, while barley stocks were reported at 2.488 MMT (2.6 MMT expected, 2.3-3.3 MMT range) vs 3.390 MMT last year. March 31 oat stocks of 1.401 MMT (2.103 MMT last year) were below average expectations of 1.7 MMT (1.5- 1.8 MMT range). Durum wheat stocks as of March 31 were reported at 3.915 MMT vs 3.8 MMT expected (3.6-4.1 MMT range) and 3.318 MMT last year.
Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/35835 for full details of yesterday afternoon’s USDA Crop Progress report. US corn planting is 23% complete vs 46% average, soybeans 6% vs 14% average and spring wheat 22% vs 49% average. Winter wheat conditions were unchanged in g/e last week at 64%, but with slight downward shifts from excellent to good.
The Malaysian Palm Oil Board will release April data on May 10. The average estimate of end April Malaysian palm oil stocks is 2.772 MMT, down from 2.917 MMT in March, but still well above year ago stocks of 2.181 MMT. April palm oil production is estimated at 1.640 MMT vs 1.672 MMT in March and 1.558 MMT last year. April palm oil exports are estimated at 1.644 MMT vs 1.618 MMT in March/1.530 MMT last year.
France exported 2.15 MMT of soft wheat in March, the largest monthly shipment of the 2018/19 marketing year (July-June) so far and up from 1.4 MMT in February.
Ukraine corn planting is 58% complete.
The outlook for the weekend and much of next week sees only light and spotty precip to occur in most of the region. The remnants of a cold front will bring some light rains to northern IN/OH and southern MI the first half of today, with totals generally less than .25”. The main rain event will then spread into the western Midwest later today and tonight and then into the rest of the region for Wednesday and finish up in the east Thursday. The low looks to bring totals of .50-1.5”+ to much of the region, with some 1.5-3” totals also possible, especially in central/NE IA and SE MN. Things then look to quiet down for Friday and most of the weekend, with a clipper type system to bring some rain chances to most of MN, IA, WI, MI and northern IL later Saturday and early Sunday. Totals with that activity currently look to run in the .20-.60” range with good coverage in those areas, but little in the way of rains are seen elsewhere. A few spotty showers are possible across the Midwest from time to time next week, but totals look to be generally under .30” and coverage around 45%. Otherwise things look to be mostly dry for the week.
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