USDA will release the monthly Crop Production and WASDE reports today at 11:00 AM CT. Regarding the grain markets, the Crop Production report will only include an objective production estimate of the winter wheat crop, with the first objective estimate of the spring wheat crop to be released in the July report and the first objective estimates of the corn and soybean crops not released until the September report. However, USDA is expected to make subjective revisions to the corn and soybean crops in today’s numbers amid the massive planting delays. Our pre-report commentary can be found on Market Insights at https://portal.rjobrien.com/MarketInsights/Blog/Read/36115, while a summary of the average trade estimates is on the page 3.
CONAB slightly raised their estimate of the Brazilian soybean crop to 114.8 MMT from 114.3 MMT previously and compares to 119.3 MMT last year. USDA was last at 117.0 MMT (122.0 MMT last year). CONAB raised their estimate of the safrinha corn crop to 70.7 MMT from 69.1 MMT previously and continuing the significant increase from last year’s 53.9 MMT. They raised the total corn crop estimate to 97.0 MMT from 95.3 MMT previously and compares to last year’s 80.7 MMT, while USDA was last at 100.0 MMT (82.0 MMT last year). CONAB estimated this year’s Brazilian soybean exports at 68.0 MMT, unchanged from last month, and down substantially from last year’s 83.3 MMT. USDA’s last estimate was similar at 69.0 MMT. CONAB sees corn exports at 32.0 MMT, up from 31.0 MMT last month and 24.8 MMT last year, and is in line with the USDA’s last official estimate.
Brazilian ag consultant AgRural solidly raised their estimate of the country’s safrinha corn crop to 75.7 MMT from 73.5 MMT previously and is notably above today’s CONAB revision of 70.7 MMT. They also raised their estimate of the Brazilian soybean crop to 115.5 MMT from 115.3 MMT, which is also above CONAB’s revision today. Brazil’s oilseed crushing industry group, ABIOVE, left their estimates of the soybean crop and exports unchanged at 117.6 MMT and 68.1 MMT.
USDA issued a press release discussing the new Trade-Related Assistance package and Disaster Relief package late yesterday. The aid packages will still favor those who are able to get as much eligible crop acreage planted as possible, but provisions are being sought for at least limited aid to be provided to PP acres that are able to get a cover crop planted to, as well. The USDA’s statement and additional info on the situation can be found at https://www.usda.gov/media/press-releases/2019/06/10/secretary-perdue-statement-disaster-and-trade-related-assistance.
The market was apparently encouraged by the degree of corn and soybean planting advancement last week, but plenty remains to get in the ground. Nationally, 83% of the corn crop is now planted, in line with expectations, and 60% of the soybean crop is planted vs 56% expected. However, for corn, IL is still only 73% planted vs 100% avg, IN 67% vs 98% avg and OH 50% vs 96% avg. Relative to the USDA’s March acreage estimates, nearly 16 million acres of corn are still unplanted relative to initial intentions. Significant delays in eastern belt soybean planting remain, as well, and also in SD, by 20-30% delays are still being reported in IA, WI and KS. Nearly 34 million acres of soybeans are still unplanted relative to the USDA’s March estimate. Corn crop conditions were reported at 59% good/excellent vs average ideas of 54% g/e, but are still the lowest for early June since 1996. Winter wheat harvest is 4% complete vs 10% avg. Spring wheat conditions declined 1% g/e. Full details on yesterday’s Crop Progress update can be found at https://portal.rjobrien.com/MarketInsights/Blog/Read/36254.
SovEcon slightly lowered their estimate of the Russian wheat crop to 82.2 MMT from 82.6 MMT previously, but remains well above USDA’s last estimate of this year’s crop of 77.0 MMT and last year’s 71.7 MMT.
With the modest pullback in prices recently, two South Korean feedmills tendered for corn overnight, but ended up buying much lower quantities than tendered for. A total of 490k tonnes of corn was sought for Nov-Dec arrival periods, but only 138k tonnes was bought between the two tenders including 70k tonnes of likely South American corn for Nov 30 arrival at $206.99/tonne c&f and 68k tonnes for Dec 1 arrival at $206.74/tonne c&f. A tender for 60k tonnes of South American soybean meal was passed on, as well.
China announced they will begin this year’s auctions of state-held soybean reserves on June 17. Last year, China sold 2.0 MMT of soybeans from state reserves through auctions from June through October.
China made minimal adjustments in their corn supply/demand projections this month, ticking the corn crop up to 254.4 MMT from 254.2 MMT previously (257.3 MMT last year), while USDA was last at 254.0 MMT. Imports were left unchanged for 2019/20 at 3.0 MMT (2.5 MMT last month), with ending stocks expected to decline by 25.5 MMT from last year vs last month’s view of a 25.7 MMT annual decline. They did not reflect any material changes in their soybean situation from last month with the crop seen at 17.3 MMT vs 16.0 MMT last year and ending stocks expected to decline 1.5 MMT from last year. China does not provide actual ending stocks estimates, but instead reflects their expected total change in stocks for the year. USDA current 2019/20 Chinese corn numbers reflect an expected 18 MMT decline in stocks from this year.
France estimated their winter rapeseed crop at 3.8 MMT, down 22% from last year, confirming the expected notable decline.
Egypt tendered for an unspecified amount of wheat after the close yesterday, seeking July 11-21 shipment. The lowest offer was Romanian at $209.11/tonne c&f followed by Russian at $209.60. A total of 830k tonnes of Russian and Romanian wheat was offered, but no U.S. wheat was offered in the tender. Weather Changes to the forecast have things looking wetter across much of the region in the next 10 days. The first round of rains is underway in the west and will move east with totals north of a line from around St Louis to Detroit look to be in the .40-1” range with some isolated heavier totals. Totals in the rest of the region look to be generally under .40”. Most of Thursday and early Friday look to be mainly dry. The next system later Friday into the weekend and Monday shows .40-1” to fall in most areas, with some isolated heavier amounts as well. The best coverage and greatest amounts are currently indicated to favor MO, IL, IN and OH. Another system the first half of next week currently shows totals of .50-1.5” with coverage of around 85-90%.
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