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Corn, wheat and soybean futures roared higher overnight following yesterday afternoon’s USDA Crop Progress report showing slower than expected planting progress for corn and soybeans and the first notable hit to winter wheat crop conditions of the year following excessive rains across HRW and SRW areas over the latest week. While a turn to drier/hotter conditions remains in the 11-16 day period remains in the forecast, which would obviously be a very favorable near term development, considerable additional rains are expected over the coming 10-day period, keeping any additional planting progress for corn and soybeans very limited. With almost 40 million acres of corn remaining unplanted as of Sunday, vs only around 10 million which would remain under a normal situation, and essentially all of it going to run up to final planting dates for full insurance coverage by the end of the first week of June at the latest, acreage uncertainty for this year’s crop is as high as it has ever been given the record slow planting pace. Roughly 19 million unplanted corn acres as of 5/26 have final planting dates of May 25 or May 31. Four of the last five weeks saw only around 7.0-8.5 million acres of corn planted per week during a period when 12-18 million acres being planted per week is common. The soybean balance sheet is in much better position to handle a notable acreage reduction, should that occur, but it is reacting strongly, as well, as roughly 60 million acres are still unplanted vs around 30 million under a normal planting situation. Overnight news is extremely limited this morning, leaving the markets to focus squarely on the weather/planting/crop condition situation.

NOTE: Due to the holiday on Monday, this week’s EIA ethanol data will be released on Thursday, while Export Sales will be out on Friday. CFTC COT data will still be released Friday, as usual. 

 U.S. corn planting was reported at 58% complete vs wire service-reported average market expectations of 63%, making just 9% advancement on the week and remaining massively behind 90% average. Some of the individual state delays remain simply stunning with IL only 35% planted vs 95% avg, IN 22% vs 85% avg, OH 22% vs 78% avg, SD 25% vs 90% avg and MN 66% vs 93% avg. The entire eastern corn belt’s final planting date for corn for full insurance coverage is June 5 with nearly 16 million acres of expected corn area in IL, IN, OH and MI combined still unplanted as of Sunday. Some very difficult decisions for farmers will need to be made this week as planting activity is likely to remain very limited over the next 7-10 days.

 U.S. soybean planting was reported at 29% complete vs 31% expected, 19% last week and 66% average. The eastern belt delays for soybeans are massive, as well, with IL 14% planted vs 70% avg, IN 11% vs 63% avg, OH 11% vs 55% and WI 20% vs 59%. Delays are notable in the west, as well, as farmers have pushed to get corn planted as possible, with IA 32% complete vs 77% avg, MO 12% vs 53% avg, MN 35% vs 77% avg and SD just 6% vs 64% avg. Final planting dates (FPD) for soybeans for full insurance coverage in most of the corn belt run from June 10-20. While there is a bit more time to get the soybean crop in, the excessive wetness obviously will push many locations past their respective FPD, as well.

 U.S. winter wheat conditions saw their first notable hit of the year, falling 5% in combined good/excellent last week to 61% vs wire service-reported average expectations for just a 1% decline in g/e. The excessive rains over the last week prompted notable declines of 15% g/e in OK, 5% KS, 4% in MO and AR and 3% in IL. Overall HRW conditions remain historically good, being the 2nd highest for late May 1999, while SRW conditions remain the lowest since 2007.

 About the only spring crop situation which isn’t notably problematic is spring wheat planting following the strong catch up a few weeks ago with 84% of the crop now planted vs 83% expected, 70% last week and 91% average. Modest delays remain in SD at 79% vs 97% avg and MT 83% vs 94% avg, but ND is 82% planted vs 87% avg with other minor states mostly in line with average, as well.

 The head of Argentina’s grain exporting chamber, CIARA, said Argentine soybean crush this year could be 10-15% below what would be expected in a good harvest year, with confirmed soybean product export sales so far roughly 30% below historical levels for this point of the year. He cited the ongoing U.S./China trade war negatively impacting soybean prices, allowing U.S. soybean products to gain a competitive advantage relative to Argentine into key Asian markets.

 Ukraine corn exports reached nearly 27 MMT for the 2018/19 marketing year vs 16.3 MMT by the same time last year.

Weather

Rains will continue across the corn belt over the next 10 days or so, and while totals will be less than those experienced of late, any rains remain problematic. The current system will work through the eastern Midwest as well as finish up across southern MN and northern IA in the next 24 hours. Totals in the next 24 hours look to be in the .25-.75” range in most cases. An area of showers and thunderstorms will work through the southern ½ of MO, IL and most of IN and OH by Thursday, producing totals of .40-1”, isolated to 1”+, to those areas. Friday looks to be mainly dry in all areas, with an area of showers and thunderstorms to bring totals of .20-.60” to all but southern IA and MO Saturday. Ideas for the first half of next week differ some. Both models indicate a disturbance to bring rains to much of the region, although the GFS indicates amounts of .50-1.5” to be fairly widespread, while the European indicates totals of around .25-.75”. The 11-16 day outlook continues to show ideas for below average precip and above average temps in much of the Plains and Midwest.

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