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COLUMN: Market eyes good planting weather

WheatIt was a difficult week for the wheat, with Minneapolis wheat falling about 13 cents and both Chicago and Kansas City wheat falling more than 25 cents. In fact, Kansas City wheat set new contract lows for the July and September contracts on ...

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Agweek File Photo

Wheat
It was a difficult week for the wheat, with Minneapolis wheat falling about 13 cents and both Chicago and Kansas City wheat falling more than 25 cents. In fact, Kansas City wheat set new contract lows for the July and September contracts on May 5.
A rallying U.S. dollar provided plenty of downside pressure to a wheat market that is struggling with lackluster demand. The dollar index reversed course, retracing about half of the previous week’s losses. As of May 5, it had gained 70 points for the week at 93.81.
Reports of good yield potential from the Kansas wheat quality tour added to oversupply concerns. The buzz going into the tour was about how wet April was in Kansas. The wet conditions brought potential for disease, but average or better yields were expected. The tour’s final yield came out at 53.5 bushels per acre, the highest since 2008. Using that yield, total production is projected at 382.4 million bushels, the highest since 2012. Rust could take its toll in some regions, since many farmers are not applying fungicide to wheat, amid poor prices.
Other states released projections, as well. Oklahoma estimated its wheat crop at 33.6 bushels per acre for a total of 128.5 million bushels. Colorado estimated 39 bushels per acre, totaling 78 million bushels. Nebraska estimated 55 bushels per acre, totaling 70.4 million bushels. The U.S. Department of Agriculture estimates the Ukrainian wheat crop is at 24.5 million metric tons. This is above previous estimates, but down from 27.3 million metric tons last year.
The May 2 crop progress report lifted winter wheat’s good to excellent rating 2 percent to 61 percent. Winter wheat was 42 percent headed, compared to 34 percent, and 39 percent last year.
Spring wheat planting was 54 percent completed, compared to a 39 percent average and 69 percent last year. Plantings are up 12 percent from the previous week. Minnesota, Montana and South Dakota were 22 to 24 percent ahead of average, at 63 percent, 60 percent and 81 percent complete.
Anticipating May’s World Agricultural Supply and Demand Estimates report, the average trade estimate for 2015 to ’16 U.S. wheat carryout is 981 million bushels, up from April’s 976 million bushels.
Wheat stocks for 2016 to ’17 are estimated to be 997 million bushels, ranging from 820 million bushels to 1.14 billion bushels. The average trade estimate for 2015 to ’16 U.S. wheat production is 1.981 billion bushels. Finally, the average trade estimate for 2015 to ’16 world ending wheat stocks is 239.7 billion bushels, up from 239.2 billion bushels on the April report.
With lackluster demand, export sales were poor, coming in at only 6.6 million bushels for 2015 to ’16 (5.1 million bushels for 2016 to ’17), below the 8.3 million bushels required to get on pace with the U.S. Department of Agriculture’s estimate of 775 million bushels. Total commitments are 1,696.1 million bushels. Export inspections came in at 13.1 million bushels. This brought total inspections up to 676.3 million bushels, 13 percent behind last year, compared to the USDA’s projection of a 9 percent decline.
For the week ending May 5, July contracts for Minneapolis wheat were down 12.75 cents at $5.31, down 25.50 cents at $4.63 for Chicago wheat, and down 25.75 cents at $4.52.
Corn
Corn started the week with no strength in the grain markets, and only found weakness from there. A stronger dollar and weakness in soybeans led the way down. Corn planting is ahead of schedule. Nationally, planting is 45 percent complete, compared to 30 percent average. Corn emergence is 13 percent, compared to a five-year average of 8 percent and 7 percent last year. For the week ending May 5, corn lost 18 cents in the July contract and lost 13.5 cents in December futures.
We saw decent export sales numbers in the USDA report, well behind 100 million bushels from the previous week’s report, but at a decent 32.7 million bushels. We continue to see pressure in the corn market as warm weather makes its way across the U.S. Planting progress is ahead of pace in many parts, and warmer weather is increasing soil temperatures and speeding emergence.
Support is from Brazil, as continued dryness in central Brazil is affecting its second-crop corn. Safrina weather is expected to stay dry for the northern part of the area, but production loss could be limited, as the country could have more planted acres than expected.
Average estimates ahead of May’s World Agricultural Supply and Demand Estimates report are for slightly lower U.S. and global 2015 to ’16 grain stocks. Analysts are estimating large ending stocks for 2016 to ’17. USDA predicts an average of 1.841 billion bushels for 2015 to ’16, compared to 1.862 in April. Estimates for ending stocks in 2016 to ’17 are 2.2 billion bushels.
Ethanol production was down 0.43 percent from the previous week, with only 6.461 million barrels produced. Stocks increased to 22.201 million barrels, up 2.64 percent the previous week and 6.93 percent last year. Corn use fell below its required use-per- week target for the second time since November, with only 96.92 million bushels, compared to the 98.3 million bushels needed.
Export inspections came in at 45.6 million bushels for the week ending April 28. This brings the 2015 to ’16 marketing year totals to 952.2 million bushels, down 13 percent from a year ago, and below the pace estimated by USDA for the year.
Export sales were 32.7 million bushels for the week ending April 28. This brings 2015 to ’16 marketing year totals to 1490.3 million bushels.
Soybeans
Soybeans continued their choppy trade this week, with double-digit gains and losses throughout the week. Soybeans closed with losses of 21 cents for old crop and 10- to 14-cent losses for new crop on May 5.
For the week ending May 5, Soybeans lost 18.5 cents in the July contract and lost 6 cents in November futures.
A stronger dollar and weaker equities are putting pressure on soybeans. We dipped below week lows and are looking at the next support of $9.85 in the July contract. The contract bounced lower, within a couple cents of year highs to $10.57 on May 3.
Average analyst guesses are for 5 to 10 percent loss estimates for soybeans from their wet harvest so far. Informa estimates 55 million metric tons of beans for Argentina, down from its previous estimate of 59.5 million metric tons. Brazil estimates were lowered to 100.1 million metric tons, compared to 100.5 million metric tons. USDA estimates 100 million metric tons.
Export inspections were 5.5 million bushels, down from the previous week. Total shipments have reached 1,570 million bushels, 7 percent behind last year. Export sales came in at 45.8 million bushels, well above the pace of 1.9 million bushels needed to meet USDA estimates.
Barley
Cash feed barley bids in Minneapolis were unchan-
ged at $2.45 per bushel. Berthold, N.D., showed bids of $2.25 and the CHS Southwest bid was $2.70 per bushel in New Salem, N.D.
As of May 1, barley is 57 percent planted, compared to 47 percent average and 70 percent last year. North Dakota and Minnesota are about 15 percent ahead of averages, at 36 percent and 65 percent complete. Washington is 15 percent behind its average at 52 percent complete, while last year it was already 85 percent done.
Projected acres for barley have come in at 3.14 million acres, down 12 percent from 2015, and the fourth smallest seeding on record. By state, North Dakota is at 800,000 acres (down 29 percent), Montana is at 1.01 million acres (up 4 percent), and Minnesota is at 100,000 acres (down 26 percent).
Durum
Cash bids for milling quality durum are unchanged at $6.25 per bushel in Berthold, N.D., and unchanged at $6.25 in Dickinson, N.D.
Projected acres for durum are 1.99 million, a 3 percent increase from 2015. North Dakota acreage is expected to increase 10 percent to 1.2 million acres and Montana acreage is expected to increase 2 percent to 630,000 acres.
Canola
Canola futures, as of May 5, were down $1 (Canadian) for the week at $499.7 per metric ton (Canadian) for the July contract.
Cash bids in Velva, N.D., were $17.40 per hundredweight for May and $16.73 for September. Enderlin, N.D., bids were $17.90 per hundredweight for May and $17.26 for September. The Hallock, Minn., bid is $17.63 for May and $16.81 for September. Fargo, N.D., bids were $17.68 for May and $17.12 for September.
Planting projections for canola came in at 1.747 million acres nationwide, a 2 percent decrease from 2015. North Dakota is expected to increase acres by 3 percent to 1.45 million acres.
Sunflowers
Cash sunflower bids in Fargo were at $16.25 per hundredweight for May.
Planting projections for sunflowers show a 7 percent decrease nationwide, coming in at 1.444 million acres. North Dakota is expected to plant 630,000 acres, a 2 percent increase, and South Dakota is expected plant 530,000 acres, a 9 percent decrease.

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