COMMENTARY 4/22/16

“The market can remain irrational longer than you can remain solvent” –  John Maynard Keynes

Storms are expected heading into the weekend with 1” to 2” amounts for the Southern third of Brazil’s corn area by Mon/Tue and the high temps begin to dissipate. A drier pattern too is developing for Argentina and are expecting 7 – 10 days of cooler temps. In the US, multiple rounds of rain are expected to affect the Central corn Belt early mid week as we get into May, which could cause a few halts to planting.

St Louis river level ~EASING @  ~ at 13.1′ and forecast 12.2′ by 4/27.  

CORN

DOWN 13

The Funds appeared exhausted and sold an est 25k contracts, dropping futures 32c from yesterday’s highs!  Brazil’s safrinha crop sees some relief in sight and Monday’s US planting progress is expected to be significantly ahead of average despite next week’s damp forecast. Expect planting to be around 25% Mon afternoon, ahead of the 5 year avg of just 16%.  More private estimates may take Brazil’s safrinha crop down into the 55-57 MMT range.  N Parana is the second leading state in Brazil, next to Mato Grosso, which accounts for 23% of total production.  Approx 40% of the safrinha corn makes up 67% of Brazil’s production and has been affected negatively.   The BA Grain Exchange maintains its est for Argentina’s crop at 25 MMT with no release from the Ag Ministry.  Their harvest progress squeeked just 2 points higher to 20.8% complete and trails last year’s 25.7%.  Yields still look to be good….just, not getting harvested.

Last Monday’s

US PLANTING PROGRESS 13% THIS WEEK, 4% LAST WEEK, 7% LAST YEAR, and 8% AVG

IL PLANTING PROGRESS 12% THIS WEEK, 2% LAST WEEK, 11% LAST YEAR, and 14% AVG

 

BEANS     

OLD~ DOWN 32       NEW~ DOWN 15

Were the Funds over-bought yesterday? The Commitment of Traders report (prior to Wed) showed large spec net buyer’s of 46,865 contracts with the commercial selling of 37,577 to be short the biggest ownership (in over a year!) at 213,000 contracts.  Argentina’s crop was reduced by the BA Exchange, down 4 to 56 MMT. Their Ag Min is estimating 57.6 and the last USDA est was 59 million.  Harvest progress there has reached 16.4% complete,  well behind last year’s 46% pace!  Our own US bean planting is expected to be 9% on Monday,  ahead of the 7% 5 yr avg.

 

WHEAT          

DOWN 29

No Fund buying, US dollar strength, and improving moisture outlook for the Plains.  The market is expecting Winter Wheat conditions to be improved on Mon afternoon’s report.