Planting concerns supportive
Wheat Wheat traded lower to start last week, but finished strong. Weather continues to be the major driving force as drought conditions remain in the Southern Plains. For the week ending April 24, May Minneapolis wheat gained 3.5 cents, September...
Wheat traded lower to start last week, but finished strong. Weather continues to be the major driving force as drought conditions remain in the Southern Plains. For the week ending April 24, May Minneapolis wheat gained 3.5 cents, September Minneapolis wheat was 0.5 cents higher, July Chicago lost 2.5 cents and July Kansas city ended with 0.5-cent gains.
Wheat started the week with losses, with selling tied to weather forecasts calling for increased chances of rain for much of the driest regions of the Southern Plains. Weekend rain events were a disappointment, but the next week is showing increased chances of rain. Traders are expecting the crop condition rating report to show unchanged conditions or slightly improved, which added to selling.
The April 22 session had wheat trading with gains as traders work back in a weather premium. Additional support came from forecasts calling for a chance of freezing temps for the Southern Plains. Light support came from position squaring ahead of the April 24 Statistics Canada report, which is expected to show a 7 percent reduction in wheat acreage.
Gains continued to be seen mid-week. Weather forecasts were calling for rain for the Southern Plains, but that rain is projected to miss the main winter wheat regions. Support also came from rain in the Northern Plains, which is delaying spring wheat planting. It is still early in the season, but spring wheat planting is running behind the five-year average. Gains were kept in check by a forecast calling for rain this week.
Wheat traded with solid gains as traders work a weather premium back into wheat. Weather forecasts have been calling for rain in much of the Southern Plains, but as each system passes, little rain falls in wheat country. As of April 22, the U.S. Drought Monitor report is estimating 20 percent of Kansas in extreme drought. Gains were limited by a slightly bearish Stats Canada report. Stats Canada estimated Canada's 2014 all-wheat acreage at 24.94 million, 500,000 acres more than the average trade estimate of 24.4 million, but 1.32 million less than last year's 26.26 million.
The U.S. Department of Agriculture estimated wheat export shipments pace for the week ending April 18 at 18.2 million bushels. This brings the year-to-date export shipments pace for wheat to 1.02 billion bushels, compared with 871.5 million for last year at this time. Wheat export sales pace for the week ending April 18 was estimated at 22.5 million bushels, with 12.5 million being old crop and 10 million being new crop. This brings wheat export sales pace to 1.14 billion bushels, compared with 966.7 million for last year. With six weeks left in wheat's export marketing year, shipments will need to average 25.8 million bushels ,and sales need to average 5.8 million to make USDA's expectations of 1.175 billion.
As of April 20, 10 percent of the nation's spring wheat crop had been planted, compared with 6 percent the previous week and 19 percent for the five-year average. Nine percent of the nation's winter wheat crop was headed, compared with 5 percent the previous week and 17 percent for the five-year average. Winter wheat crop conditions were unchanged last week with the crop now rated 34 percent good to excellent, 33 percent fair and 33 percent poor to very poor.
The corn market stumbled on April 21, but firmed up into the week with the lack of planting progress. Corn planting has started, but the progress report was disappointing and supported a bounce in the futures last week. There was also talk, with the planting delays, that corn acres and yield potential will shrink. Weather is driving the market. As of midmorning on April 25, the May contract was up 12 cents for the week, while the December contract gained 10 cents.
The corn futures were under pressure on April 25, with planting progress and long position liquidation. Corn was planted over the weekend in the heart of the Corn Belt, and temperatures continue to warm up. Additional weakness came from talk that Chinese corn imports are up more than 14 percent through March versus last year, with most of the corn coming from Argentina and Ukraine, while their U.S. imports are down more than 16 percent. The sharp losses in the wheat complex also spilled over.
The corn market was firm in the overnight and remained there for the day on a turnaround April 23. Support came from the planting progress report that was less than expected. The trade was expecting 12 percent of the crop would be in the ground and the five-year average would be 14 percent, but only 6 percent was planted as of April 20. South Korea bought 60,000 metric tons and Mexico bought 240,000 metric tons of U.S. corn. The corn futures were strong again on April 23, with rain falling in the Midwest, delaying planting. Fresh export demand last week was also supportive, and China did purchase 120,000 metric tons of sorghum.
The futures were slightly lower on April 24, as the ethanol report showed production down last week and stocks were up, along with imports. Crude oil stocks are also at an 83-year high. The weather forecast looks dry in the six- to 14-day timeframe, and we are still early for planting. The export sales report was good on April 24, but there were again no sales to China. The report also showed 115,000 metric tons switched from China to South Korea and 54,000 metric tons were canceled. The futures were up on the morning of April 25, with rain in the forecast for the weekend.
Ethanol production for the week ending April 18 averaged 910,000 barrels per day, down 3.09 percent from the previous week. Total ethanol production for the week was 6.37 million barrels. Corn used in production for the week ending April 18 is estimated at 95.55 million bushels and needs to average 98.627 million bushels per week to meet this crop year's USDA estimate of 5 billion bushels. Stocks were 16.518 million barrels, up 3.55 percent from the previous week.
The crop progress report showed 6 percent of the corn is planted versus 4 percent one year ago and a five-year average of 14 percent.
USDA's export inspections report was bullish for corn at 63 million bushels versus the 38 million needed to keep pace with USDA projections of 1.75 billion. Corn export sales were estimated at 39.4 million bushels, which was above the 3.7 million needed to stay on pace with USDA's estimate of 1.75 billion. The shipments came in at 63.8 million bushels, above the 38.3 million needed to keep pace with USDA projections.
As of the April 24 close, May soybeans were 42 cents lower for the week, while the November contract lost 8.25 cents. In early April 25 trade, soybeans were up 4 to 14 cents.
Beneficial rainfall over the weekend led to sharp losses on April 21, and profit taking kept the selling going April 22. Weather has been somewhat mixed but looks decent for planting in the next couple of weeks. Old-crop stocks remain extremely tight, but prices appear to have reached a high enough level to ration demand for now. The new-crop fundamental outlook is seen as bearish because of expected record plantings, though there is plenty of uncertainty. April 21 export inspections were light, but were still seen as bullish as they came in above the amount needed to keep pace with USDA's projection.
Old-crop soybeans traded both sides of unchanged on April 23 before closing with losses for the fourth consecutive day. New-crop contracts closed with gains as spreads continue to soften, indicating slowing commercial demand. Ongoing support from tight supplies has been overcome lately by slowing Chinese demand. In addition, unconfirmed reports on April 23 indicated some Brazilian shipments might be switching their destination to the U.S.
Soybeans traded narrowly mixed in quiet trade through much of the day April 24 before settling with small gains. Unconfirmed reports of South American shipments switching from China to the U.S. provided pressure, but April 24 export sales supported, as they reinforced the tightness of old-crop stocks. Stats Canada's planting intentions report pegged soybean planting at 5.3 million acres, which would be a 16.5 percent increase from last year.
USDA reported soybean export inspections pace for the week ending April 18 at 5.1 million bushels. This brings the year-to-date export shipments pace for soybeans to 1.51 billion bushels, compared with 1.237 billion for last year at this time. Soybean export sales pace for the week ending April 18 was estimated at 4.4 million bushels. Soybean export sales remain above USDA's demand projection of 1.58 billion bushels. Shipments were reported at 6.7 million.
As of April 20, 25 percent of the nation's barley had been planted, compared with 16 percent the previous week and 23 percent for the five-year average. USDA reported no barley export shipments for the week ending April 18. This brings the year-to-date export shipments total for barley to 7.3 million bushels, compared with 6.3 million for last year. Barley export sales pace for the week ending April 18 was estimated at 100,000 bushels. This brings the year-to-date export sales pace for barley to 8.3 million bushels, compared with 6.2 million for last year. Stats Canada estimated Canada's 2014 barley acreage at 6.31 million acres, compared with the average trade estimate of 6.7 million acres and 7.08 million last year. April 24 cash feed barley bids in Minneapolis were at $3.95 per bushel, while malting barley bids were at $6.50.
USDA reported durum export shipments pace for the week ending April 18 at 1.6 million bushels, all going to Algeria. Durum export sales pace for the week ending April 18 was estimated at 500,000 bushels, with 400,000 bushels being old crop and 100,000 bushels new crop. This brings durum's export sales pace to 19.7 million bushels, compared with 20.1 million. April 24 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 April 24 with $17.30 (Canadian) losses. Canola started the week with losses from position squaring ahead of what was expected to be a bearish Stats Canada acreage report. Canola recovered some of its losses late in the week because of a surprisingly friendly Stats Canada report. Stats Canada estimated Canada's canola 2014 acreage at 19.8 million, compared with the average trade estimate of 21.1 million, and 19.9 million last year. April 24 cash canola bids in Velva, N.D., were at $19.38 per hundredweight.
USDA estimated soybean oil export pace for the week ending April 18 at 5.7 thousand metric tons. This brings soybean oil export sales pace to 583.4 thousand metric tons, compared with 830.7 thousand metric tons for last year. April 24 cash sunflower bids in Fargo, N.D., were at $21.75 per hundredweight.