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Erin Brown / Grand Vale Creative

Delayed planting across the U.S.

Wheat

The wheat market started out flat this week after weekend rains hit the winter wheat belt. Rainfall amounts were largely scattered, with lower than expected totals. The April 23 crop progress report showed spring wheat plantings were only 3 percent versus trade expectations of 7 to 9 percent and the five-year average of 25 percent. Winter wheat condition ratings remained unchanged from the previous week at 31 percent good to excellent versus trade expectations of 30 to 33 percent. This compares to 54 percent good to excellent last year at this time. Winter wheat headed is at 13 percent compared to 30 percent last year and 19 percent for the five-year average.

These ratings led the wheat complex to an upside reversal in April 24 trade. It was a very good move technically as July Kansas City closed above the 50-day moving average of $5.155. Kansas City saw the most strength on thoughts of deteriorating conditions on warmer weather in the six to 10 day forecast for the winter wheat belt. Eight to14 day forecasts call for cooler temperatures and both forecasts show above average chances of rainfall. Reports of central Kansas wheat experiencing frost damage sparked large gains in April 25 trade as rainfall amounts maybe too little, too late. The Kansas Wheat Tour will run April 30 through May 3 and is widely anticipated to show poorer yield estimates.

The spring wheat belt continues to struggle with planting delays. Both the six to 10 and eight to 14 day forecasts call for cooler than normal temperatures and normal to below normal chances of rainfall. Southwestern North Dakota experienced 4 inches of snowfall April 23-24 which is leading to further delays.

Trade estimates are out for the April 27 Stats Canada report. All wheat seedings are expected to come in at 23.038 million acres with 20.5 as the lowest guess and 24.2 as the high guess. Durum acreage is expected at 5.442 million acres with a low/high of 4.6 & 5.8 million acres.

Weekly export sales for all wheat totaled 21.2 million bushels with 10.9 million bushels for the 2017-18 marketing year. This puts total marketing year sales at 855 million bushels, 16 percent below the previous marketing year. Marketing year shipments total 748.4 million bushels, 11 percent below the previous year.

For the week ending April 26, May contracts for Minneapolis wheat were down 0.5 cents at $5.995, up 17.5 cents at $4.8075 for Chicago wheat, and up 19 cents at $5.0175 for Kansas City wheat.

Corn

The corn market saw some nice gains this week as drought conditions are starting to form in southern Brazil and U.S. planting is well behind schedule. There are reports that southern Brazil is drying up and are at risk of losses due to the lack of rains, with some of the worst spots in Paraná, one of the larger producing areas in Brazil. Corn also found strength following the strong rally in the wheat markets. Exports have been strong the last couple months and are also helping to support this market. A favorable week ahead should help farmers get started, but they can only do so much until the ground warms up in the northern Midwest. The weather is warming up this week, with most of the Midwest in the 60s and 70s.

In the third corn planting progress report of the year, corn was 5 percent planted versus 15 percent last year and 14 percent for the five-year average. Not much happened this past week, but the favorable weather should help get the "I" states in the field the weekend of April 25. The trade was looking for U.S. corn planting at 7 to 8 percent versus 3 percent last week. As of April 20, Illinois was only 4 percent planted versus 20 percent average and Indiana was 1 percent versus 5 percent average. Iowa and Minnesota were not even 1 percent planted yet versus the five-year average of 11-13 percent.

For corn and hard red spring wheat, weather changes include drier, warmer weather forecast for the HRS wheat area, so hopefully by May 1 planting can get started in many areas. Temps for the next seven days are forecast above normal for the HRS wheat, northwestern Corn Belt, and hard red winter wheat belts. Below normal temps are still forecast for the southeast Corn Belt, which is suffering from its 8th straight week of cold temps.

Precipitation is forecast to be above normal in the central Corn Belt the next seven days, but normal to below normal elsewhere. Precipitation in the eight to 14 day period is below normal for the corn belt, HRW wheat and HRS wheat belt, with much of the rain gone from earlier forecasts.

Ethanol production for the week ending April 20 averaged 985,000 barrels per day. Corn use for ethanol was 102.61 million bushels, below the 103.655 million bushels pace needed for U.S. Department of Agriculture's estimates of 5.575 billion bushels. Ethanol stocks are at 21.701 million barrels, up 1.67 percent from last week and down 6.74 percent versus last year.

Commodity Futures Trading Commission data on April 17 showed the funds decreasing their strong net long stance, moving from net long 175,000 contracts to net long 138,000 contracts.

Corn prices are still technically in an uptrend. December resistance is at $4.165, which was seen two weeks ago and before that last seen in August. If we break through the first resistance, $4.20 and then the contract highs of $4.295 seen on July 11 are next resistance. Support is down at $3.925-$3.95. For the week ending April 26, July corn was up 9.75 cents and December corn was up 9 cents.

Soybeans

After early week pressure, soybean futures stabilized to minimize the week's losses. There was a surprise early in the week as the funds unexpectedly added to their net long positions and continue to carry large managed fund long position, even as U.S. weather improves and the recent chart action turned negative. CFTC data on April 18 showed the funds surprisingly increasing their strong net long stance, moving from net long 176,000 contracts to net long 193,000 contracts.

China continues to bid up Brazil's soybean prices and is keeping purchases from the U.S. at a minimum. Expect this game between the U.S. and China to continue for another month or so until they can (hopefully) hammer out a compromise to keep the two countries out of a full blown trade war.

In the first soybean planting progress report of the year, soybeans were 2 percent planted versus 5 percent last year and 2 percent for the five-year average. Soybean acres are the biggest uncertainty at the moment, as it is expected that they will increase acres compare to the 89 million acre estimate in the March 30 report. This news has been competing with Argentina drought news and is keeping soybean prices in a narrow range.

Bloomberg reported that China's soybean imports from the U.S. dropped to the lowest March total in a decade as escalating trade tensions between the two countries continue. China has been aggressively buying from Brazil, and the poor weekly U.S. export reports continue to show that.

November soybean resistance is at the April 2 highs of $10.60. November soybeans broke through support that is the 50-day moving average of $10.325 and the next step of support is at $10.10. The CME Group will increase daily price limits starting May 1 for soybeans, moving from 65 cents to 75 cents. For the week ending April 26, July 2017 soybeans down 1.5 cents and November soybeans were down 2.75 cents.

Canola

For the week ending April 25, July canola futures in Winnipeg were up $1.20 Canadian at $535 per metric ton. The Canadian dollar was down .0058 to .7787. This brings the U.S. price to $18.90 per hundredweight.

• Velva, N.D., $18.71 per hundredweight, September at $17.44.

• Enderlin, N.D., $19.53 per hundredweight, September at $18.04.

• Hallock, Minn., $19.12 per hundredweight, September at $17.62.

• Fargo, N.D., $19.50 per hundredweight, September at $18.05.

Average trade estimates for the April 27 Stats Canada report have canola plantings at 23.66 million acres up 2.9 percent from 2017.

Barley

Cash feed barley bids in Minneapolis were at $2.85, while malting barley received no quote. The Berthold, N.D., bid is $2.60 and the CHS Southwest New Salem, N.D., bid is $3.00.

Durum

Cash bids for milling quality durum are $6.00 in Berthold and at $5.50 in Dickinson, N.D.

Sunflower

Cash sunflower bids in Fargo were at $17.85, October at $18.50. For the week ending April 25, soybean oil was down 50 cents at $30.79 on the May contract.

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