COMMENTARY 4/26/18

Quick-ship premiums  disappeared as fast as they materialized!  Below normal temps the next several days with 3 days of warmer temps, followed by a chance for rain and additional cooling to finish off next week. The first week of May doesn’t look terribly productive for planting unless the forecasts are off.  In SA, the Brazil dryness expands and intensifies over the 10 days until Parana has some opportunities for showers.  Argentina should stay relatively wet.

DOWN 1

Planters are gonna roll this weekend into next week, at least for the first 3 days.  Export Sales this am were disappointing at 27.4 mill vs expectations of 31 -47 mill, but only 14.2 are needed per week from here on out. Mexico was a big buyer of 15.2 mill while China cancelled 2.6, Egypt cancelled 2.0 and some Unknown cancelled 8.0.  There was a new sale of 107.6 K MT or about 4.2 mill bu of 17/18 corn sold to Unknown.  A Univ of IL article is suggesting this year’s cold, wet April could lead (so far) to a 5-10% higher amount of late planting. This in turn could reduce the US’s trend line yield est from 171 to as low as 168.9 and could have next year’s carryout dropping another 150 mill bu to 1.63 bill bu.  On the continuing stranded milo vessel story, so far 60KMT of milo steaming towards China has been diverted to Japan.  Sensing a major deal, some has traded as much as $100 per MT below market value!

Last Mon’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              

UNCHANGED

Mixed today.  Increasing meal futures gave a boost to board crush margins.  Export Sales were none too beefy at 13.6 vs expectations of 15-26 and just 3.5 needed per week.  Big buyers were Indonesia at 4.9 and the Netherlands at 3.0.  China was NOT a buyer of ours but did cancel 360k bu (not mill).  Meal sales were decent at 224 vs expectations of 100-300.  Big buyers were Vietnam and Thailand.  We’re waiting to see if Tres Sec Mnuchin is successful at resolving the China trade dispute.

 

WHEAT

DOWN 5

A stronger dollar appears to have been more important than good Export Sales.  Apparently the Funds were absent from buying!  Old crop Sales were hearty and above thoughts at 10.9 vs expectations of (neg) -4 to +7 mill bu.  New crop was 10.3 vs expectations of 6 – 13 mill.  Planting in Argentina is forecast to be a 14 yr high but concerns linger over past drought conditions potentially lowering acreage.  France is getting more competitive in the world market due to the US dollar’s strength vs the Euro as well as Black Sea prices firming.  Demand continues to emerge from traditional markets like Algeria AND non-traditionals like Angola and Cuba.  There are more stories of freeze damage to the HRW areas.

Last Mon’s 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