AgriVisor Grain Recap

Friday, May 10, 2019
 Even though President Trump put new tariffs on China after the breakdown in trade talks last weekend, that wasn’t the focal point of the market. But even as that occurred, the 2 sides continued to have discussions regarding trade/economic policy.  Where this is headed after last weekend, no one can be certain.  China has said they will have some new retaliatory moves to counter our additional tariffs, but have not said what they will be.  But as far as ag is concerned, there isn’t much they can do.  They do have 60,000 tons of pork and 270 mln. bu. of soybeans on the books that could be cancelled, but after today’s USDA numbers we aren’t certain they will have much impact. 

  Weather and planting will take precedence with the USDA numbers now behind.  The short term weather picture isn’t quite as good as it was, with shower potential on Sat and Sun.  Originally, they were to be mostly dry, but might still be.  Early week looks good.  But, the new 6-10 and 8-14 day forecasts are a little worse. The 6-10 day outlook generally shows above normal moisture from the Ill/Ind line to the far West.  Temps will be above normal in the western Corn Belt and Central Plains, with normal temps covering most of the rest of the Midwest.  The 8-14 day forecast shows the moisture pattern moving east a little, covering nearly all of the Corn Belt and Great Plains. The southern Corn Belt to the southeast will be warmer than normal. The western Corn Belt and to the north and west will be cooler than normal.

   Planting numbers will become increasingly important with each week.  Being generous, Monday’s corn number might be 41-45%, with soybeans 21-25%. Anything less than that should be supportive. Take note of Monday’s midday trade expectations. 

  The USDA numbers were negative, but less so than some might think just looking at the surface.  USDA did slash the old crop soybean exports 100 mln. bu., probably the most negative change. That was responsible for the big increase in old stocks, now expected to hit 995 mln. bu. that was also highly responsible for the new crop 970 mln. bu. stocks estimate. Production numbers for soybeans and demand numbers were about as expected. Yield was left at 49.5 bu.

   The corn numbers look a little negative on the surface with the 2.49 bln. bu. new-crop ending stocks.  But, in part, a few in the trade were looking for USDA to lower the new crop yield forecast, mistakenly so. They stayed at 176. Bu. Demand expectations for new crop should have been about in line with general ideas, although maybe slightly less than expected. They did cut ethanol again on old crop, another 50 mln. bu., but it got little attention. It was responsible for nearly all of the increase in old-crop stocks. 

   The winter wheat production forecast, 1.268 bln. bu. was very close to expectations, as was the related all wheat number, 1.897 bln. bu. The winter wheat yield was 50.3 bu., with the forecast all wheat yield raised slightly because of it to 48.6 bu. They did lower old crop exports 20 mln. bu, along with feeding, causing old-crop stocks to edge up to 1.13 bln. bu. New crop stocks, are forecast to be 1.14 bln. bu. 

   This was also the first forecast for the new-crop world situation, but we haven’t had time to glean the data for details, other than to say world production forecasts are starting relatively high.  But, the new demand forecasts continue to show growth too.