- It has been one of the slowest starts to the Midwest planting season in years. NASS reported that last week there was just 1.5 days suitable for fieldwork in IN, 2.5 days in IL, and 4.3 days in IA. For the month of April, the 3-state average number of days suitable for fieldwork was 8.5, or the lowest in 6 years. Much of the Midwest has been soaked in the last 24 hours, and the forecast is leaning cool/wet for the next week. It has been a far from perfect start to the year, and acreage and yield expectations are now far less certain.
- Slow exports along with expectations for delayed corn seedings/increased soybean acres weighed on Chicago soybean prices at the start of the week. Soy products closed sharply mixed, with meal following soybeans lower, while soyoil bounced from contract lows marked on Friday. Funds were estimated sellers of 6,000 soybean contracts After the close, NASS reported national soybean planting progress advanced 2 points to 3% complete, versus 5% last year and the 5-year average of 6%. It is still early in the season for the Cornbelt, but IN is 4% behind average, while IL and MN were both 3% behind. The largest drags are in the Delta where MS is 21% behind average, LA is 19% behind, and AR is 26% under its 5-year average. The latest round of storms will further push back planting dates, while the ten-day forecast stays cool/wet for the Cornbelt. Funds continue to add to their already record net short soybean position, waiting on confirmation of a China trade announcement that is at least a week out in the best-case scenario. An announcement is likely to trigger a major Chicago soy recovery.
- Chicago corn futures ended fractionally higher despite a plunging wheat market. The advance in last week’s planting progress was less than expected, and very little fieldwork looks to be accomplished in the next 10 days. Note that last year, there was surge in activity beyond late April, but a similar surge in 2019 requires a massive and quick shift in the Central US climate pattern. 15% of the US corn crop was seeded as of Sunday. This compares to 15% a year ago and 27% on average. It is estimated that national planting progress in the next 7 days will advance just 5- 7%. If the two-week weather forecast verifies it is possible that progress on May 14 will reach just 30-32% complete, vs. 60% on average. Corn prices will stay firm until lasting Central US dryness appears. US-Chinese talks resume on Tuesday and amid funds’ record short, risk is beginning to lean to the upside at current prices. Spot oat futures are up to $3.18/bu on adverse US weather.
- CME wheat fell to new contract lows; Spot KC fell to the lowest level since December of 2016. Fresh input continues to lean bearish, though work does suggest the world’s exportable surplus won’t be nearly as robust as it was in 2016-17. Black Sea cash prices should form a bottom in the next 1-2 weeks, but Northern Hemisphere weather remains broadly favourable. US winter wheat conditions on Sunday were pegged at 64% good/excellent, vs. 62% the prior week and 33% a year ago. SRW ratings fell slightly, but substantial improvement was recorded in OK, SD and TX. It remains that Chicago will gain on other classes longer term as North American high-pro supplies stay more than abundant. A more normal pattern of rainfall is forecast across Eastern Europe and key areas of Ukraine and S Russia. More is needed to validate record production, but trend yields there are becoming more probable. We also note that Russian new crop is now offered at $185/mt, vs. $190/mt last week. World wheat supplies now appear as if they will rebound from last year.