COLUMN: Wild week for grain markets
Row crops had a great start to the week, with wheat following the other crops. Wheat moved lower at the end of the week, with profit-taking and pressure with May options expiring. Wheat traders were cautious about the rally in wheat prices, with abundant global stocks and favorable growing conditions for winter wheat in Russia, Ukraine, Europe and the Black Sea region. Another good crop is expected across the ocean, but not the record production of last year. For the week ending April 21, Minneapolis wheat gained 20 cents, Chicago was up 36 cents and Kansas City was up 30.75 cents.
Wheat has been a follower, not wanting to fall behind and lose more acres. We had a great start to the week, with it looking as if heavy rains in the Plains were built into trades. U.S. and global stocks are high, and it shows in the weak local basis, as high futures are increasing farmer selling. July Chicago wheat posted its highest close in more than two months, as pressure was put on the bearish noncommercials to get out of short positions.
Weekly wheat exports were neutral, and continue to be bearish for the marketing year. Wheat’s rally of more than 50 cents in less than two weeks has been a surprise. Fundamentals have not been in play, as technical and short covering has been supporting this market. U.S. winter wheat crop ratings came in above the five-year average on the April 18 report.
As of April 17, 27 percent of the nation’s spring wheat crop was planted, compared with 19 percent for the five-year average. Winter wheat’s crop condition rating is at 57 percent good to excellent, 34 percent fair and 9 percent poor or very poor. Last year’s ratings at this time last year was 42 percent good to excellent, 39 percent fair and 19 percent poor or very poor. In winter wheat, 12 percent of the crop was headed, compared with 4 percent the previous week and 15 percent for the five-year average.
Wheat export sales came in at 16.8 million bushels for the week ending April 14. That brings the marketing year totals to 647.2 million bushels, 13 percent behind last year. Weekly wheat export sales came in at 10.8 million bushels for the week ending April 6. That brings the marketing year totals to 720.8 million bushels, behind last year’s pace and well behind the U.S. Department of Agriculture’s numbers expected for this year.
The corn market ended the week about even. Positive trading early-to-mid week brought prices up to a level not seen since early November. Late week trade brought prices back down.
April 18 to 20 saw 16.25 cent gains on the May contract — December contracts were up 14.50 cents — benefitting from the hot, dry weather affecting Brazil’s second corn crop. Further help came from export sales, as 24.3 million bushels were reported this week, with 15.09 million bushels for 2015 to ’16 delivery.
Corn planting data, released April 18, showed planting ahead of schedule at 13 percent complete nationally, compared with an 8 percent average. Texas was 6 percent behind schedule, at 49 percent complete. Missouri was 35 percent complete, compared with a 21 percent average. Kansas was 35 percent complete, compared with a 16 percent average.
Ethanol gave corn a shot in the arm, as stocks were lowered. Corn use was just above necessary weekly use, but so long as ethanol demand can hold, that is less of a worry. Ethanol production was up 0.11 percent from the previous week, and 0.97 percent from last year, at 6.573 million barrels. As of April 15, stocks were 22.046 million barrels, down 1.21 percent from the previous week, but up 3.3 percent from last year. Corn use was pegged at 98.5 million bushels. Total use has now reached near 3.3 million bushels, with weekly use needing to match 98.31 million bushels to meet the USDA’s estimate of 5.2 million bushels.
Export inspections and sales were neutral to positive. Export inspections were reported at 42.9 million bushels, down 4 percent from the previous week, but 1.6 percent above last year. Total shipments have reached 861.1 million bushels, 13 percent behind last year, compared with the USDA estimate of an 11 percent decrease. Export sales data April 21 indicated 47.35 million bushels of net sales. This is up 6 percent from the previous week, and above the four-week average. Total commitments are 1,375 million bushels, 11.5 percent behind last year. USDA is estimating exports at 1,650 million bushels.
For the week ending April 21, the May contract was up 6 cents at $3.84, and the June contract was up 7.75 cents at $3.89. New-crop December contracts traded up 5.25 cents, at $3.93.
Soybeans traded up nearly 65 cents on the May contract April 18 to 21.
Midweek trade saw positive movemen. Early week pressure from a weakening Brazilian real after impeachment proceedings in Brazil was partially offset by a weakening U.S. dollar, and it didn’t take long for the exchange rate to shift back down from its quick trip above 3.6.
April 21 export sales came in at 14.98 million bushels, down 10 percent from the previous week. Total commitments are 1.6 million bushels, 7 percent behind last year, and on pace to reach USDA’s estimate of 1.7 million bushels.
For the week ending April 21, the May contract was up 62.75 cents, at $10.18. July contracts were up 63.25 cents at $10.27. New-crop November contracts traded up 32 cents, at $9.98.
Cash feed barley bids in Minneapolis were unchanged, at $2.45 per bushel. Berthold, N.D., bids dropped 5 cents this week, to $2.20 per bushel, and the CHS Southwest bid is $2.50 per bushel in New Salem, N.D.
As of April 17, 33 percent of the nation’s spring wheat crop was planted, compared with 19 percent the previous week, and 38 percent for the five-year average.
Cash bids for milling quality durum were up 25 cents this week at $6.25 per bushel in Berthold, N.D., and unchanged at $6.25 per bushel in Dickinson, N.D.
At the close on April 21, May canola futures in Winnipeg, Manitoba, traded up $17.8 (Canadian) to $494.7 per metric ton. The Canadian dollar was at 0.78. This brings the U.S. price to $17.63 per hundredweight.
April 21 cash bids in Velva, N.D., were $17.41 per hundredweight for April and May. Enderlin, N.D., bids were at $17.88 per hundredweight for April and May. The Hallock, Minn., bid was $17.80 per hundredweight for May delivery, and $16.74 for September.
Cash sunflower bids in Fargo, N.D., were up 10 cents for the week, at $16.25 per hundredweight for March and April. New crop is at $17.10.
Soybean oil traded up 75 cents the week ending April 21 to $34.13 per hundredweight on May contracts.