Warmer, wetter weather ahead could soon accelerate planting pace
Lingering worries of late-planted crops this season are evaporating on the promise of warmer forecasts ahead, with some further drought relief possible in parched areas of the U.S. Plains. That spells relief for crop production but caused some pain in the grain markets Friday, with corn, soybeans and wheat futures all suffering moderate losses to end the week.
Cooler-than-normal weather is anticipated across most of the central U.S. this weekend, with warmer temperatures creeping into the Northern Plains and upper Midwest starting on Monday and Tuesday. The Southern Plains and lower Midwest could also see a round of rainfall over the weekend.
Some weakness in technology and energy stocks pushed the Dow down more than 200 points in midmorning trading to 24,418 as another seesaw week on Wall St. drew to a close. President Trump’s accusation that oil prices are “artificially high” appeared to have an impact on energy prices, with crude oil, diesel and gasoline all down moderately Friday morning. The U.S. Dollar firmed moderately, meantime.
For Friday, commodity funds were net sellers of corn (-16,000), soybeans (-12,500) and wheat (-7,000).
Corn prices bounced lower as the 2018 planting season readies itself to take off next week, closing at their lowest levels since March 28. May and July futures each fell 5.5 cents to close at $3.7650 and $3.8550, respectively.
For the week, corn futures were down 2.5%.
Barge freight declines helped push corn and soybean cash bids up significantly at several river terminals, trending between 5 and 13 cents higher. Cash bids were steady at most other Midwestern locations. Farmer sales are expected to remain slow in the near future as planting season begins to heat up.
Chinese corn production is expected to trend 1.1% higher in 2018 to 8.582 billion bushels, according to the country’s Ministry of Agriculture and Rural Affairs.
China has also sold 113.6 million bushels of its 2014 state reserves of corn at auction Friday, which was nearly 73% of the total amount available for sale.
France’s 2018 corn planting is underway but well behind the pace of last season. As of April 16, French consultancy FranceAgriMer estimates 6% of the country’s corn crop had been planted, up from 1% the prior week. Last year at this time, 49% of France’s corn crop had been planted.
Some timely rains in South Africa could boost that country’s 2018 corn production by 3%, according to a recent trade analyst survey. Analysts expect the South African government to bump its harvest forecast from March estimates of 489.0 million bushels to a new estimate of 501.9 million bushels. South Africa’s Crop Estimates Committee will issue its next production forecasts Wednesday, April 25.
Corn is trending higher as an ingredient in the Japan’s animal feed blends, accounting for 47.8% of total volume in February, compared to 45.9% the prior year. Sorghum, wheat and barley accounted for another 7.3% of Japanese animal feed in February.
Growers looking for basis pushes in the cash market to move inventory ahead of planting can find them, though getting the top bids may take some looking. Farm Futures senior grain market analyst Bryce Knorr shares his latest findings in his newest Basis Outlook.
Preliminary volume estimates were for 327,046 contracts, up more than 20% from Thursday’s final count of 270,702.
Soybean prices buckled again on worries that export sales will be down moving forward until U.S.-China trade disputes are solved. May futures fell 8.5 cents to $10.2875, with July futures losing 8.75 cents to $10.4025.
For the week, soybean prices were down 2.4%.
China’s soybean acreage could reach 20.5 million acres for 2018, according to Ministry of Agriculture officials. Farmers in the country’s northeastern provinces may receive higher subsidies than they would planting corn.
China’s subsequent 2018 soybean output could increase 1.9% compared to last year, reaching 557.8 million bushels.
Brazil’s ongoing soybean harvest has reached 91% completion, in line with the 92% pace set a year ago and the 90% five-year average.
Canadian canola futures were mixed Friday, with May futures picking up small gains on short-covering as July futures took small losses.
Preliminary volume estimates were for 201,751 contracts, down moderately from Thursday’s final count of 237,843.
Wheat prices backtracked again on wetter forecasts for the U.S. Plains, which could help boost winter wheat yield and quality. May Chicago SRW prices tumbled 13.5 cents to $4.6325, while May Kansas City HRW prices dropped 12.25 cents to $5.0225.
With favorable planting conditions not far off, spring wheat futures also dropped double digits. May MGEX futures were down 13.25 cents Friday, closing back below $5 per bushel for the first time in two weeks.
For the week, CBOT wheat futures were down 1.9%.
FranceAgriMer’s assessment of France’s 2017/18 soft wheat crop is that it remains 78% good-to-excellent condition, unchanged from the week prior. The consultancy also estimates 100% of the country’s spring barley crop has been planted, with 81% in GE condition.
FAS is forecasting Kazakhstani wheat production for 2018/19 to total 514.4 million bushels, which is 0.8% less than the country’s 2017/18 production, due to fewer planted acres. Kazakhstan’s 2018/19 wheat exports are projected flat, at 293.9 million bushels.
An Indonesian flour mill has purchased 1.1 million bushels of wheat with Black Sea origins for shipment in July.
China sold about 36,700 bushels of its state wheat reserves at auction Friday, which was only 0.05% of the total amount available for sale.
Twenty ships carrying more than 47 million bushels of grain sorghum are in the waters between the U.S. and China. At least five of those shipments reversed course when China announced additional tariffs on U.S. sorghum imports Tuesday, Reuters reports.
Preliminary volume estimates were for 150,298 CBOT contracts, up more than 20% from Thursday’s final count of 124,418.