-Focus remains squarely on continued rains/historically slow planting
-Corn OI up sharply yesterday
-EU wheat/corn crop ideas bumped higher
Grain markets moved higher again overnight on yesterday afternoon’s Crop Progress report showing very little/minimal planting progress being made in the eastern corn belt last week, while the extended forecast continues to show a consistent series of rain events over the next 10+ days. It’s another very quiet news morning leaving the markets to remain squarely focused on the U.S. planting situation and weather. Corn open interest was up nearly 50k contracts yesterday indicating more than just short-covering is occurring on the buy side of the market. Soybean OI was up just 4k contracts, though, and CBOT wheat OI down 4k.
U.S. corn planting as of 5/19 was 49% complete (30% previous week/80% avg) and while mostly in line with market expectations of 50%, progress in several key states was minimal last week and clearly was the attention-grabber of this week’s update. IN is only 14% planted, advancing only slightly from the previous week’s 6% and compares to 73% avg. OH is now only 9% planted vs 4% last week and 62% avg, while IL advanced to just 24% from 11% a week earlier and 89% avg. SD is only 19% planted vs 4% last week and 76% avg. Iowa was able to have a good week with 70% of the corn crop now planted, up from 48% the previous week and compares to 89% avg. With the decision time quickly approaching for pushing to get corn in or attempting to switch crops/take Prevent Planting as the forecast remains extremely wet, reduced corn acreage ideas remain active. Combined remaining corn area among the most-delayed states of IL, IN, MI, MN, MO, OH, SD and WI is roughly 30.6 million acres, with 8.5 mil in IL alone.
Soybean planting was reported at 19% complete vs 22% expected and compared to 9% the previous week, 53% last year and 47% average. While delays continue to build for the soybean crop, as well, overall concern is still fairly limited with the focus on corn. However, it is hard to simply ignore IL 9% planted vs 51% avg, IN 6% vs 43% avg, OH 4% vs 35% avg and SD 4% vs 39% avg.
Spring wheat planting saw a solid week, advancing to 70% complete from 45% the previous week, above expectations of 63% and only modestly behind 76% last year and 80% avg. The Dakotas saw a big week with North jumping to 66% complete from 37% a week earlier (74% avg) and South now 70% vs 46% last week and 94% avg.
Overall winter wheat conditions improved another 2% g/e last week to the highest so far this year of 66%, with solid increases in OK and KS. HRW conditions are the best since 1999. SRW conditions declined slightly last week overall, but the focus of the wheat market remains the forecast for significant rains across the HRW and SRW belts, increasing quality concerns as crop maturity advances.
EU ag analyst/consultant Coceral raised their estimate of the EU soft wheat crop to 140.3 MMT from 139.8 MMT previously (127.4 MMT last year), while their EU corn crop estimate was also raised to 62.9 MMT from 61.0 MMT previously (60.9 MMT last year). The lowered their estimate of the EU rapeseed crop to 17.9 MMT from 18.5 MMT previously (19.7 MMT last year), while the EU barley crop estimate was slightly lowered to 59.0 MMT from 59.4 MMT previously (56.1 MMT last year).
Philippines is looking to import 300k tonnes of corn to make up for last year’s production shortfall and may allow reduced tariffs being assessed on the shipments.
Taiwan bought 111k tonnes of U.S. wheat (various classes/quantities) mostly for July shipment. Ethiopia bought 600k tonnes of optional-origin wheat, as expected, following their tender which closed April 30.
India’s ongoing postponement of their tender for non-GMO corn continues as the deadline for the tender was extended, once again, to June 6, following previous extensions to May 22 and May 15 from the original May 8 deadline.
No major changes. An exceptionally wet pattern looks to continue across at least the NW 3/4th of the Midwest in the next 10 days. The current system will continue to spread its rains across the region in the next 2 days. Additional totals west of the MS River still look to be in the 1-3” range in much of IA and N. MO, with .50-1.5” elsewhere. An area of 1-2” is seen for MN and the rest of MO, as well as the northern ½ of IL and southern WI. .50-1.5” will fall in the rest of IL and into most of IN and MI, with .25-.75” elsewhere. A less organized, but still meaningful system will begin to develop some hit and miss showers and thunderstorms by later Thursday and then those hit and miss showers and thunderstorms will continue into Friday and Saturday. That activity still looks to favor MN, WI, WI and the northern 1/3rd of IL, IN and OH. Estimates on amounts look to be in the .50-1” range with that activity, with some 1”+ amounts also possible. The forecast for Sunday and early next week indicates another low pressure to work through and bring rains to at least the NW 3/4th of the region, possibly all areas. Estimates on amounts with that system are running in the .50-1” range, with areas of 1”+ fairly common in MN, IA, WI, E NE and NW IL and coverage of around 85-95%.
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