-Continued wet/cool pattern keeps acreage/yield concerns high
-Mexico imports of U.S. wheat seen rising this year
-Indian palm oil imports strong at the expense of other oils
A rather quiet news morning has the market’s focus remaining squarely on the weather/planting situation and, unfortunately, little has changed on that front with a continued wet/cool pattern expected to remain in place over the next 10 days at least, with the longer-term guidance now showing the potential to remain the same through the 11-16 day period, as well. The potential detrimental impact on U.S. soybean acreage/yields has quickly become a notable focus of the market of late, even though the U.S. soybean balance sheet is in a much better position to handle a crop decline than corn. d
The head of Mexico’s wheat industry association, CANIMOLT, which represents roughly 80% of Mexico’s wheat millers, said he expects Mexico to import 3.5-4.0 MMT of wheat from the U.S. in calendar year 2018, representing a solid increase from 2018 imports of 2.8 MMT. In 2017, Mexico imported 3.7 MMT of wheat from the U.S. He sees wheat imports from Russia at around 1 MMT in 2019, with imports from Argentina and Canada making up the remainder of the expected 5.1-5.2 MMT in total imports for the year.
India’s move to reduce the refined palm oil import duty earlier in the year continues to support imports of the product at the expense of other oils. India imported 818k tonnes of palm oil in May vs 707k tonnes in April and sharply above year ago May imports of 495k tonnes. Refined palm oil imports in May were 371k tonnes vs 158k tonnes last year in May. On the other hand, soybean oil imports in May of 232k tonnes were down from 249k tonnes in April and down sharply from year ago May imports of 400k tonnes. Sunflower oil imports also continue to suffer with May imports of 131k tonnes down 61% from year ago levels.
French soft wheat crop conditions were unchanged last week at 80% good/excellent and compares to 76% g/e at this time last year. France’s corn crop was rated 82% g/e vs 74% g/e a year ago.
Taiwan issued a routine tender for 83k tonnes of U.S. wheat of various classes for August shipment.
Above average rainfall is still seen across much of the region in the next 10 days. Rains were already beginning to move into the western Midwest this morning. The forecast for the next 5 days sees waves of showers and thunderstorms to roll through the region. It will not rain in all areas every day, but combined totals from now until Tuesday look to be in the .40-1” range, with areas of 1”+ and coverage of around 85%. Only northern IA is indicated to see less than .50”. Tuesday and Wednesday of next week look to be mainly dry. More showers and thunderstorms are seen to occur across most of the region the second of next week. Ideas call for totals of .50-1”+ with coverage of around 85-90%. Temps will be running average to below average across the region in the next 10 days. The outlook for the 11-16 day period has reverted back to expectations for continuing the above normal precip/below normal temp regime after earlier maps showed prospects to ridging to be seen across the corn belt.
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