COMMENTARY 4/24/18

The Gulf HAS been making progress unloading corn barges!  With recent drops in freight locally, higher values up on the IL and high river levels in the Upper Miss, nearbys have inverted (primarily in yc) causing an inversion from Apr into May.  This is a time you DON’T want to be tardy filling April contracts.

CORN

UP 3

Weather models are putting a better chance for moisture in the possibility for next week.  That would threaten planting progress.  The 5 yr avg this NEXT Mon needs to be 27%.  Strong demand globally and summer exports in the US could get beneficially if Brazil gets drier.  Concerns are increasing on the dry portion of the safrinha crop has been without moisture now for 2-3 weeks and the temps are expected to change to more above normal.  The USDA is forecasting a 9.5% increase in 17/18 exports from the US, Argentina, Brazil,  and Ukraine.  That would be a 11.4 MMT increase over last year.  Oct-April shipments are already est ahead of that, up 12%.  Marginal gains are expected from Arg and Ukriane. With the safrinha crop being dry, the thought of a mere 2.1 MMT decline in summer exports from that origin could be too optimistic.  Record unshipped sales in the US, along with a record spring export pace COULD be indicating that the upcoming summer program could be quite strong.

 

Monday’s Planting Progress:

US YC PLANTED:   5% TW,  3% LW, 15% LY, and 14% AVG

IL YC PLANTED:   4% TW,  0% LW, 30% LY, and 20% AVG

BEANS              

UP 1

The big story today is Argentina buying both old and new crop US beans!  They bought 60 K 17/18 and 70 K 18/19.  Some 370 K MT of sales have been announced (with today’s 60 K).  The weaker Real and hesitant producer selling has been an encourager as well as Arg harvest running behind pace.  Likely there is also queeziness about China trade/tariff issues.  Our US Treas Sec is headed to China per Pres Trump comments to negotiate a potential trade deal.  This could be a thing of the past by the end of the weekend. Don’t hold your breath just yet!  Chinese hog margins have dropped significantly since mid Jan, down $40 per head in the last month! This is the lowest hog margins have been there since Apr 2014.

 

 Planting Progress:

US YC PLANTED:   2% TW,  0% LW, 5% LY, and 2% AVG

IL YC PLANTED:   0% TW,  0% LW, 3% LY, and 1% AVG

WHEAT

UP 11

Mixed early but gained strength as the day went on.  Spring wheat is weaker as weather in the N looks a bit more favorable for planting.  Recent rains in the HRW belt indicate that conditions SHOULD improve in the coming weeks. Spring wheat planting is just 3%, trailing the 5 yr avg of 25% big time.

Planting Progress:

US WINTER WHEAT CONDITIONS:   31% TW,  31% LW, and 54% LY

IL WINTER WHEAT CONDITIONS:    56% TW,  54% LW, and 74% LY

US WINTER WHEAT HEADED:     13% TW,  9% LW, 30% LY, and 19% AVG

IL WINTER WHEAT HEADED:    4% TW,  3% LW, 24% LY, and 6% AVG

US SPRING WHEAT PLANTED:   3% TW, 3% LW, 21% LY, and 25% AVG