Planting delays support markets

Wheat: weather delays continue

Wheat traded sloppy to start and end last week, while good gains filled in the middle. Slow planting progress helped keep wheat on the positive side, but late week pressure from news that Japan suspended U.S. wheat imports trimmed wheat's gains. For the week ending May 23, July Minneapolis gained 9.75 cents, September Minneapolis improved 6 cents, July Chicago picked up 1.25 cents and July Kansas City gained 0.25 cent.

Wheat started the short week with gains but faded as the session proceeded. Early support spilled over from a higher corn and soybean market. But the strength in other grains was not enough to keep wheat higher. Late in the session, wheat came under pressure from thoughts that the U.S. Department of Agriculture's crop progress report will show an improvement in winter wheat's crop condition rating. Additional pressure spilled over from a sharply higher U.S. dollar. Losses were kept in check by strength in other grains.

Wheat opened and traded May 30 on the defense. Early selling was tied to spillover pressure from the other grains, as both corn and soybeans opened and traded with losses. The news that has caused the most issues for wheat this week is the finding of genetically modified wheat in Oregon. No one expected this news to be much of an issue for the market, but news that Japan was suspending imports of white wheat hit the news wires. That news pressured wheat and has resulted in Japan and U.S. officials planning a meeting to discuss how to move forward. Japan is a large purchaser of U.S. wheat, so it is important to settle concerns.

USDA's wheat export inspections for the week ending May 24 were estimated at 21.2 million bushels. Wheat export sales pace was estimated at a combined total of 28.1 million bushels with 1.3 million old crop and 26.8 million new crop. With one week left in the marketing year, shipments need to average 37.5 million bushels and sales need to average 28.1 million to make USDA's expectations of 1.025 billion.

As of May 26, 79 percent of the nation's spring wheat crop was planted, compared with 67 percent the previous week and 86 percent for the five-year average. Forty-two percent of the nation's spring wheat was emerged, compared with 22 percent the previous week and 66 percent for the five-year average.

Sixty percent of the nation's winter wheat was headed, compared with 43 percent the previous week and 72 percent for the five-year average. USDA estimated the nation's winter wheat crop condition rating at 31 percent good to excellent, 27 percent fair and 42 percent poor or very poor, unchanged from the previous week.

Corn: excessive rain

The corn futures traded firmer last week and ended with decent gains in the new crop contracts. Buying interest surfaced with unexpected heavy rain in the northern and eastern Corn Belt, which will delay planting. Planting progress came out as expected, but there is still 13.6 million acres of seed in the bag. For the week ending May 30, July gained 3 cents and December was up 27 cents.

The corn market traded with decent gains on May 28 and 29 as a result of unexpected heavy rain in parts of Iowa and Illinois over the holiday weekend. Corn is at or near its final planting date for insurance purposes and now producers are going to have to decide between planting the crop late, switching to another crop, or leaving the acreage unplanted. There is talk that as much as 2 million to 3 million acres may not get planted.

The futures set back on May 30 with some light profit taking. The ethanol report was also below USDA's estimate and added early morning weakness. Additional pressure came from the lack of demand and talk of cheaper priced corn from foreign competition, in addition to a large crop in Brazil. The new crop contracts did come off their lows with more rain forecast, which will continue to delay planting.

Ethanol production for the week ending May 24 averaged 863,000 barrels per day, down 4.3 percent from last year. Corn used in production for the week ending May 24 is estimated at 90.6 million bushels and needs to average 94.69 million per week to meet this crop year's USDA estimate of 4.6 billion. Stocks as of May 24 were 16.05 million barrels, down 25.4 percent from last year. The U.S. imported ethanol for the first time in four weeks.

The crop progress report showed 86 percent of the corn is planted, versus 99 percent one year ago and a five-year average of 90 percent. Corn that is emerged was at 54 percent, versus 89 percent one year ago and a five-year average of 67 percent.

USDA's export inspections for corn were estimated at 12.4 million bushels for the week ending May 24. Wheat export sales pace was estimated at a combined total of 34.5 million bushels, with 3.4 million old crop and 31.1 million new crop. With 14 weeks left in the marketing year, shipments need to average 15.8 million bushels and sales need to average 5 million to make USDA's expectations of 750 million.

Soybeans: rains hinder planting

Soybeans saw good strength as traders work a weather premium into the market. Tight old crop supplies and concerns that not all of the 2013 soybean crop will get planted (at least on a timely basis) helped push old crop soybeans to $15 and new crop to $13. For the week ending May 30, July soybeans were up 19.5 cents, while November posted 41.5-cent gains.

Soybeans traded lower early May 29, before a small recovery later in the session led to a moderately lower close in old crop and a slightly higher close for new crop. While old crop supplies remain tight, a cancelation of a 147,000-metric-ton sale to China limited buying with further cancelations a possibility. Support for the November contract was tied to planting concerns, with the May 28 planting progress being reported below expectations.

Trade was light May 30, as old crop contracts closed lower and planting uncertainty led to small gains in new crop. Old crop supplies remain tight, but a drop in basis levels has tempered enthusiasm. The slow sales pace out of South America has provided underlying support as Brazil is 5 percent sold, compared with 40 percent at this time last year. USDA announced a sale of 120,000 metric tons of soybeans to China for 2013 and 2014.

USDA reported soybean export inspections pace for the week ending May 24 at 3.4 million bushels. Soybean export sales pace was estimated at 23.8 million bushels (-4 million for 2012 and 2013), bringing this year's total to 1.344 billion bushels.

Planting progress as of May 26 had 44 percent of the U.S. soybean crop planted, compared with 24 percent the previous week and the five-year average of 61 percent. Soybean emergence as of May 26 was at 14 percent, compared with 3 percent the previous week and the five-year average of 30 percent.

Barley

USDA reported barley export shipments pace for the week ending May 24 at 40,000 bushels, with 36,000 bushels going to China and 4,000 bushels going to Mexico. No barley export sales were reported for the week.

As of May 26, 78 percent of the nation's barley had been planted, compared with 70 percent the previous week and 87 percent for the five-year average. Barley emergence was estimated at 46 percent, compared with 35 percent the previous week and 64 percent for the five-year average.

May 30 cash feed barley bids in Minneapolis were at $5.05 per bushel, while malting barley bids were at $6.65.

Durum

USDA reported durum export shipments pace for the week ending May 24 at 1.208 million bushels, with all of the bushels going to Italy. Durum export sales pace was estimated at a combined total of 1.5 million bushels, with 700,000 bushels being old crop and 800,000 bushels new.

As of May 26, 53 percent of North Dakota's durum crop was planted, compared with 69 percent for the five-year average. Durum emergence was at 19 percent, compared with 46 percent for the five-year average.

May 30 cash bids for milling quality durum were at $8.25 per bushel in Berthold, N.D., while Dickinson, N.D., bids were at $8.

Dry beans

As of May 28, 8 percent of North Dakota's dry bean crop had been planted, compared with zero the previous week and 43 percent for the five-year average. Minnesota producers reported planting progress at 26 percent complete, compared with 10 percent the previous week and 58 percent for the five-year average.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed $10.70 (Canadian) higher for the week ending May 30. Canola started the week with good gains, but then struggled the rest of the short week. Early support came from a weaker Canadian dollar, as well as from spillover support from a stronger U.S. soybean complex. Midweek pressure came from reports of export cancelations from China. It was U.S. soybean purchases that were canceled, but it set a selling wave through the entire vegetable oil complex. The new crop months were supported by continued planting concerns, as rain continues to hamper planting progress in the Northern Plains.

As of May 26, 41 percent of North Dakota's canola crop had been planted, compared with 75 percent for the five-year average. Emergence was at 9 percent, compared with 43 percent for the five-year average.

May 30 old crop cash canola bids in Velva, N.D., were at $28.61 per hundredweight, while new crop canola bids were $24.96.

Sunflowers

As of May 26, 9 percent of the nation's sunflower crop had been planted, compared with none the previous week and 26 percent for the five-year average.

USDA estimated soybean oil export sales pace for the week ending May 24 at 2.9 trillion metric tons, with most of the bean oil going to Mexico, Venezuela and Canada.

May 30 old crop cash sunflower bids in Fargo, N.D., were at $22.50 per hundredweight, while new crop bids were $23.75.