COMMENTARY 4/26/16

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

Significant rainfall affects much of the N Plains, Corn Belt and Delta into Thursday, but bypasses HRW wheat areas from W Kansas and S.  Another big system comes through over the weekend, bringing more heavy rain to the S Plains, Corn Belt, and Delta.  After that we turn unseasonably cool with highs in the 50 – 60’s.  The NWS forecast shows 70% of ycorn and ysb areas could receive at least 2.00” of rain in the next 7 days!

St Louis river level ~STEADY @  ~ at 13.1′ and forecast 13.0′ by 4/30.  

CORN

UP 5

Commodities continue to be caught up in a money flow situation that simply wants to own commodities (for whatever reason). It can also be see in iron ore and cotton. There are fundamental issues that are helping this rally. The ongoing drought in 2nd crop corn in Brazil is having an impact on supplies and forecasts of widespread rain across the US that could cause planting delays( especially in the N US).   The USDA has planting at 30% yesterday, nearly DOUBLE the 5-year average of 16%!  Progress as of May 1 a year ago was 45%.  In SA, Production estimates for Brazil are still dropping from the hot, dry pollination weather for safrinha crop.  The USDA est is at 84.0 MMT but some private projections are now UNDER -80 MMT.

 Monday’s

US PLANTING PROGRESS 30% THIS WEEK, 13% LAST WEEK, 16% LAST YEAR, and 16% AVG

IL PLANTING PROGRESS 42% THIS WEEK, 12% LAST WEEK, 26% LAST YEAR, and 25% AVG

 

BEANS     

OLD~ UP 18       NEW~ UP 11

Speculators continue to buy with the likelihood of a modest reduction in SA production.  Funds were estimated buyers of 15k beans, 9k meal and sellers of 2k oil. Argentina’s forecast is finally cool and dry this week.  There are a wide range of Production estimates (compare to the last April USDA forecast of 59.0 MMT)  Our US  planting is est by the USDA at 3% as of April 24,  2% above for both last year and the 5-year average.  Progress a year ago was 10%.

 

WHEAT          

UP 10

Up with the row crops!  Monday’s crop progress actually showed an improvement in winter wheat conditions with G/E ratings up 3 to 59% and compares to 42% last year.  Spring wheat planting  was at 42% this year vs 50% last year, but still above the five-year average of 28%. N Dakota is at 26% compared to 36% in 15′ and an average of 18%.