(Farm and Ranch Guide) – Wheat struggled last week with most of the sessions seeing steady to lower closes. Improving weather conditions in the major wheat producing regions of the U.S. caused traders to take to the short side. For the week ending Thursday, May 22, July Minneapolis dropped 8.25 cents, September Minneapolis dropped 9.25 cents, July Chicago slipped 15.0 cents, and July Kansas City gave back 16.0 cents.
The May 19 and 20 sessions had wheat trading mainly steady as the market looked for confirmation of improving weather forecasts. The May 19 disappointing export inspections estimate, which clearly is showing that wheat will not make its export sales pace, added selling pressure.
May 20 had buying support from the previous afternoon’s friendly Crop Progress report (which showed another week of declining conditions). Improving weather conditions kept traders on their heels and limited wheat’s ability to hold gains.
The rest of the week saw selling move into the winter wheat contracts while Minneapolis held its own May 21 (but gave up in to selling the next day). The winter wheat exchanges were under pressure from forecasts that are calling for rain for the next 5 days across the driest regions of the Southern Plains. Wheat is heading in this region so any amount of rain will certainly help fill heads. It will not end the drought or save the crop, but it will increase the potential size of the crop.
Dry conditions have moved into the Northern Plains, which is allowing for drills to get back into the fields. Planting progress for spring wheat is likely to show a huge increase in the June 3 USDA Crop Progress report.
USDA estimated the wheat export shipments pace at 20.3 MB for the week ending May 16. That week’s wheat export sales pace was estimated at 12.9 MB with 5.2 MB old crop and 7.7 MB new crop. With 2 week’s left in wheat’s export marketing year, shipments will need to average 37.97 MB and sales need to average 8.5 MB to make USDA’s expectations of 1.185 BB.
As of May 18, 49% of the nation’s spring wheat crop had been planted compared to 68% for the five-year average. Spring wheat emergence was estimated at 24% compared to 40% for the five-year average. Fifty-seven percent of the nation’s winter wheat crop was headed compared to 44% last week and 58% for the five-year average. Winter wheat crop conditions declined 1% to now rated 29% g/e, 27% fair, and 42% p/vp.
Corn
The corn market was lower again last week and traded down to support with planting progress and ideal conditions in the Corn Belt. The weather is the market mover and there are no major concerns other than North Dakota. As of close n May 22, the July contract was down 6.75 cents for the week, while the December contract lost 7.5 cents.
Corn lost another 10 cents on May 19 and 20 as commercial and noncommercial selling extended the recent downtrend. Corn planting came in at 73% complete and just below the five-year average of 76%. Emergence is ahead of the five-year average for most of the Corn Belt and reports are that the crop is in very good condition. The weather remained dry and warmer last week in the northern Corn Belt and that is where progress is lacking. There was also talk that China is planning on canceling all of its old crop purchases and they are sourcing their corn from the Ukraine and Argentina.
Selling pressure slowed that last couple days of the week as the futures trade at support. The export inspections and sales came within estimates, although fresh sale announcements this week have been quiet. The ethanol report also showed corn use up last week and stocks dropped. Ethanol plants continue to operate with decent margins. The corn futures have dropped to the 50% retracement level between the low to the recent high and those levels held to end the week.
Ethanol production for the week ending May 16 averaged 925,000 barrels/day, up .33% vs. the previous week. Total ethanol production for the week ending May 16 was 6.475 million barrels. Corn used in production is estimated at 97.13 million bushels and needs to average 99.439 million bushels/week to meet this crop year’s USDA estimate of 5 billion bushels. Stocks were 16.99 million barrels, down 1.80% vs. the previous week.
The crop progress report showed 73% of the corn is planted vs. 65% one year ago and a five-year average of 76%. Emergence is at 34% vs. 17% one year ago and a five-year average of 42%.
USDA’s export inspection report was bearish for corn at 41.7 mb vs. the 43.9 mb needed to keep pace with USDA projections of 1.900 bb. Corn export sales were estimated at 20.0 mb, which was above the 9.2 mb needed to stay on pace with USDA’s estimate of 1.90 bb. The shipments came in at 45.6 mb, above the 44.2 mb that was needed to keep pace with USDA projections.
Soybeans
As of close on May 22, July soybeans were 53.75 cents higher for the week while the November contract gained 49.25 cents.At 11 a.m. on May 23 July soybeans were trading 4.0 cents lower while November was down 9.0 cents.
Commercial buying supported the market on May 19 as soybeans opened the week with higher trade. New crop contracts received support from some unwinding of bull spreads. The market was expecting planting progress to remain near the five-year average on that afternoon’s Crop Progress report. The May 19 export inspections were bullish, coming in above the amount needed to keep pace with the USDA’s projection.
Soybeans were trading higher early May 20 with follow-through buying providing support. The May 19 Crop Progress report showed planting a bit behind the five-year average at 33% while emergence was at 9% compared to the average of 11%. The strong trade through the first half of the session was followed by renewed commercial selling and a collapse into the close to finish with losses.
July soybeans closed at their highest level in three weeks on May 21 before setting yet another new closing high on May 22 following strong gains. Commercial buying of extremely tight old crop supplies continued to support the market. New crop moved higher as well, seeing a potential opportunity to buy acres in places where corn has not been planted yet.
Exports have remained supportive with another bullish round of export sales Thursday morning, May 22, bringing the total for the year to 3% above the USDA’s estimate. That morning the USDA announced a sale of 120,000 mt of new crop soybeans to China.
USDA reported the soybean export inspections pace at 6.2 MB for the week ending May 16. This brings the year to date export shipments pace for soybeans to 1.538 BB compared to 1.260 BB for last year at this time. That week’s soybean export sales pace was estimated at 22.6 MB (6.0 MB for 2013/2014). Soybean export sales remain above the USDA’s demand projection of 1.600 BB. Shipments were reported at 7.5 MB.
Planting progress as of May 18 had 33% of the U.S. soybean crop planted compared to the five-year average of 38%. Emergence was at 9% compared to the five-year average of 11%.
Barley
As of May 18, 68% of the nation’s barley had been planted compared to 69% for the five-year average. Barley emergence was estimated at 37% compared to 40% for the five-year average.
USDA reported the barley export shipments pace at 65,910 bushels on May 22. That week’s barley export sales estimate was at a negative 300,000 bushels (South Korea cancelation).
On May 22 cash feed barley bids in Minneapolis were at $3.95 while malting bids were $6.
Durum
As of May 18, 14% of North Dakota’s durum crop was planted compared to 41% for the five-year average. Emergence was estimated at 1% compared to 19% for the five-year average.
USDA reported durum export shipments pace at 1.1 BB for the week ending May 16 with all of the bushels going to Algeria. That week’s durum export sales pace was estimated at 400,000 bushels.
On May 22 cash bids for milling quality durum were at $7.10 in Berthold, while Dickinson’s bid was at $7.40.
Canola
Canola futures on the Winnipeg exchange closed the week ending May 22 with $3.60 CD gains. Canola started the week with gains but finished the week on the defense.
Canola was supported by strong commercial buying. Planting delays and spill over buying from a sharply higher U.S. soybean complex added support. Canola broke away from the U.S. soybean complex may 22 trading lower due to improving weather conditions. Warm dry weather is allowing for planters to get into the fields.
As of May 18, North Dakota producers had 13% of the state’s canola planted compared to 44% for the five-year average.
Cash canola bids on May 22 in Velva were at $21.37.
Dry edible
As of May 18, North Dakota producers had 2% of their dry beans planted compared to 14% for the five-year average. Minnesota producers had 1% planted compared to 21% for the five-year average.
Sunflower
As of May 18, 1% of the nation’s sunflower crop was planted compared to 6% for the five-year average.
USDA estimated rgw soybean oil export sales pace at 41.3 TMT for the week ending May 16. This brings the soybean oil export sales pace to 634.9 TMT compared to 837.1 TMT for last year.
Cash sunflower bids in Fargo were at $21.35 on May 22.
