Weather impacts plantingHard wheat traded with strong gains last week, while Chicago struggled. Wheat continues to see support from drought concerns and delayed planting progress. For the week ending May 1, July Minneapolis gained 11.75 cents, September Minneapolis gained 16.25 cents, July Chicago dropped 1 cent and July Kansas City picked up 24.5 cents. For the month of April, September Minneapolis closed 30.75 higher, July Chicago gained 20 cents and July Kansas City gained 47.25 cents.
By: Ray Grabanski, Agweek
Hard wheat traded with strong gains last week, while Chicago struggled. Wheat continues to see support from drought concerns and delayed planting progress. For the week ending May 1, July Minneapolis gained 11.75 cents, September Minneapolis gained 16.25 cents, July Chicago dropped 1 cent and July Kansas City picked up 24.5 cents. For the month of April, September Minneapolis closed 30.75 higher, July Chicago gained 20 cents and July Kansas City gained 47.25 cents.
The first three sessions of the week brought aggressive buying and good gains to the wheat exchanges. Early support was from reports of disappointing rainfall for much of the western region of the Southern Plains. Light support was also from rain in the Northern Plains, which will result in delayed planting progress. Additional support came from the Wheat Quality Tour, which confirmed poor yield potential for the winter wheat crop. The eastern leg of the tour was close to 34 bushels per acre, compared with last year’s average of 44 bushels. The second leg of the tour, which covered the western regions of Kansas, forecasted the potential yield at 27 bushels compared with last year’s 37 bushels. Additional support came from concerns of planting delays as the Northern Plains continues to deal with cold wet conditions.
The May 1 session had wheat struggling. Wheat trimmed its losses as a result of reports from the third day of the Wheat Quality Tour, which found a little better yield potential for wheat in southeast Kansas. Oklahoma’s wheat commission estimated its state’s wheat potential at 66.5 million bushels, compared with 105.4 million last year. So far, wheat’s production issue is a U.S. problem, not a world problem, and that will limit the potential of wheat. In the end, spillover selling from a sharply lower U.S. soybean complex proved to be too much for wheat to overcome. Technical selling to correct an overbought market condition was also evident.
The U.S. Department of Agriculture estimated wheat export shipments pace for the week ending April 25 at 23.2 million bushels. Wheat export sales pace for the week ending April 25 was estimated at 16 million bushels with 7.9 million being old crop and 8.1 million being new crop. With five week’s left in wheat’s export marketing year, shipments will need to average 26.2 million bushels and sales will need to average 5 million bushels to make USDA’s expectations of 1.175 billion bushels.
As of April 27, 18 percent of the nation’s spring wheat crop had been planted, compared with 10 percent the previous week and 30 percent for the five-year average. Spring wheat emergence was estimated at 5 percent, compared with zero the previous week and 9 percent for the five-year average. Eighteen percent of the nation’s winter wheat crop was headed, compared with 9 percent the previous week and 26 percent for the five-year average. Winter wheat crop conditions declined 1 percent to 33 percent good to excellent, 33 percent fair and 34 percent poor to very poor.
The corn market firmed up early last week with wet and cool weather that kept the tractors out of the fields, but selling entered the trade by May 1. The planting progress report on April 28 showed progress was made the previous week, but came in at the low end of estimates and offered support. And while the weather forecast supported the market early in the week, it changed and created profit-taking to end the week. Weather is driving the market. As of midmorning on May 2, the July contract was down 12.5 cents for the week, while the December contract lost 11.5 cents.
The corn futures traded with decent gains to start the week. Support came from widespread rain over the weekend that slowed planting progress. The export inspections were also friendly and above USDA’s estimate on April 28. Buying interest continued on April 29 with the planting progress report that showed 19 percent of the corn in the ground and at the low end of estimates and below the five-year average of 28 percent.
On May 1, the corn futures came under selling pressure and remained that way into May 2. The forecast changed and showed increasing temperatures and drier weather for the next week. Prices that were the highest in eight months led to some additional commercial selling, while outside markets pressured, as well. The ethanol report was also disappointing and showed corn usage down last week and stocks grew to levels last seen one year ago. Export sales have been good, but shipments continue to lag, as sales stand at 43.1 million metric tons, with 16.5 million metric tons left to be shipped. Larger production estimates also continue to surface out of South America.
Ethanol production for the week ending April 25 averaged 898,000 barrels per day, down 1.32 percent from the previous week. Total ethanol production for the week was 6.286 million barrels. Corn used in production the week ending April 25 is estimated at 94.29 million bushels and needs to average 98.864 million bushels per week to meet this crop year’s USDA estimate of 5 billion bushels. Stocks were 17.212 million barrels, up 4.2 percent from the previous week.
The crop progress report showed 19 percent of the corn is planted versus 5 percent one year ago and a five-year average of 28 percent. Emergence is at 3 percent versus 2 percent one year ago and a five-year average of 6 percent.
USDA’s export inspections report was bullish for corn at 45.5 million bushels, versus the 36.6 million needed to keep pace with USDA projections of 1.75 billion. Corn export sales were estimated at 36.9 million bushels, which was above the 2.8 million needed to stay on pace with USDA’s estimate of 1.75 billion. The shipments came in at 47.9 million, above the 37.1 million needed to keep pace with USDA projections.
As of the May 1 close, July soybeans were 33.25 cents lower for the week, while the November contract lost 14.25 cents. In early May 2 trade, soybeans were down 3 to up 2 cents.
Soybeans traded mostly higher on April 28 and 29 with strong commercial demand for soybean meal and bull spreading action providing support. Tight old-crop stocks continued to provide support, leading to a new high close for the July contract on April 29. Wet weather has slowed planting thus far, with USDA reporting its first round of planting progress April 28 at 3 percent planted. Wet weather has been supportive to grains in general, though an argument could be made that it should be negative to new-crop contracts, as slow corn planting could increase the likelihood of acres switching to soybeans. April 28 export inspections were better than expected, coming in well above the amount needed to keep pace with USDA’s projection.
Soybeans traded lower April 30 as bull spreaders took profits. Planting progress has been limited with conditions cool and wet, but there is still plenty of time for soybeans to be planted. The export market has slowed substantially for soybeans as China’s demand has waned, but export sales are still above USDA’s projected total. Strong crush demand and tight old-crop stocks continue to provide underlying support.
Soybeans traded sharply lower May 1 after USDA reported a net cancellation of 600,000 bushels of soybeans in the export sales report. This triggered commercial selling, with additional pressure coming from rumors of ships unloading Brazilian soybeans in the U.S. Soybean prices are high at the moment with the July contract being around 50 percent above USDA’s cost of production.
USDA reported soybean export inspections pace for the week ending April 25 at 9.3 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.519 billion, compared with 1.246 billion for last year at this time. Soybean export sales pace for the week ending April 25 was estimated at 2.3 million bushels. This included cancellations of 600,000 bushels for the 2013 to 2014 marketing year. Soybean export sales remain above USDA’s demand projection of 1.58 billion bushels. Shipments were reported at 10 million bushels.
Planting progress as of April 27 had 3 percent of the U.S. soybean crop planted, compared with the five-year average of 4 percent.
As of April 27, 33 percent of the nation’s barley had been planted, compared with 25 percent the previous week and 33 percent for the five-year average. Barley emergence was estimated at 11 percent, compared with zero the previous week and 8 percent for the five-year average. USDA reported barley export shipments pace for the week ending April 25 at 17,086 bushels. No barley export sales were reported. May 1 cash feed barley bids in Minneapolis were at $4 per bushel while malting barley bids were at $6.25.
USDA reported no durum export shipments for the week ending April 25. No durum export sales were reported. May 1 cash bids for milling quality durum were at $7 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was at $7.
Canola futures on the Winnipeg, Manitoba, exchange closed the week ending May 1 with $5.50 (Canadian) losses. Canola started the week with gains with support by demand concerns as old crop vegetable oil demand remains strong. The middle sessions had canola virtually trading steady. But selling stepped in to close out the week. Pressure came from spillover selling from a sharply lower session in the U.S. soybean complex. Light selling was also tied to an increase in farmer selling. May 1 cash canola bids in Velva, N.D., were at $20.19 per hundredweight.
USDA estimated soybean oil export pace for the week ending April 25 at 0.5 thousand metric tons. This brings soybean oil export sales pace to 583.9 thousand metric tons, compared with 831.8 thousand metric tons for last year. May 1 cash sunflower bids in Fargo, N.D., were at $21.40 per hundredweight.