AgResource Daily Farm Marketing Advice for Thursday: 1/ Corn Producers: Forward sell/hedge an estimated 30% of your estimated 2018 corn crop if Dec’18 corn futures reach $4.14.
Ag markets are slightly higher at midday, led by KC wheat on a percentage basis following more uncertainty over recent and upcoming freeze damage. President Trump’s change in tone on NAFTA – re-negotiating terms in the future rather than pulling out of the deal outright – has lent further support, though all markets are within 2-3 cents of unchanged.
Crude has extended its overnight losses, with spot down $1.25/barrel, and now looks to test $48/barrel. Gasoline and ethanol have followed. EU milling wheat looks to end the day flat, and otherwise there’s a lack of breaking news today.
Weekly US soybean export sales were better than expected, corn sales were within trade expectations but solid nonetheless, while old crop wheat sales were abysmal. Through the week ending April 20th, exporters sold a net 30 Mil Bu of beans, vs. just 5 Mil in the prior week and compared to 8 Mil on this week a year ago – even as South American production estimates were falling last March. Corn sales totaled 39 Mil Bu, up roughly 10 Mil on the week and double the pace needed to meet the USDA’s target.
Old crop wheat sales totaled just 2 Mil Bu, vs. 15 Mil in the previous week and the lowest of the 2016/17 crop year. Large wheat cancellations were made by an unknown destination, the majority of which were HRS and white wheat. New crop wheat sales totaled 11 Mil Bu, double the previous week but not overly impressive.
For their respective marketing years to date, the US has sold 2,010 Mil Bu of corn, up 38% from last year and already 90% of the USDA’s forecast with four months left in the season. Total soybean export commitments rest at 2,073 Mil Bu, up 24% on last year and a record 102% of the USDA’s forecast – the USDA will be forced to raise 16/17 soy exports 25 Mil Bu. Cumulative wheat export sales total 1,018 Mil Bu, up 39% from last year and just 7 Mil shy of the USDA’s forecast – though weekly sales of 2-3 Mil Bu are unlikely to trigger any revision to US exports within the May WASDE.
The US drought monitor this week now isolates actual drought to the Southeast and Eastern OK – which will be eliminated in the next five days – while abnormal dryness is shrinking rather quickly across the Western Plains. Overall, just 22% of the continental US is experiencing drought, vs. 36% a month ago and 40% on this week in 2016. Weather watchers are now debating planting dates – which are a concern – against the odds of drought this summer following a burst in soil moisture so far in spring.
Morocco has raised its tariff on imported soft wheat to 135% until the end of 2017, citing a much improved harvest, which also gives the first glimpse at N African production this year following widely variable estimates previously.
The Central US forecast at midday is unchanged, and so maintains a drier trend in the 6-10 day period, particularly across the Central Plains and Western Corn Belt. However, the midday GFS also maintains much cooler than normal temps into May 5th, with additional frost events scheduled through the period. Recorded minimums on Saturday morning will be watched closely. The model also continues to fine-tune weekend precip estimates, and currently centers rainfall of 5-6+” across E OK, the bulk of MO & IL and parts of IN and MI. The drier trend next week and beyond is welcomed, but amid the lack of sustained warmth ARC doubts much fieldwork will get done in the next 10 days. 1-5 day (top) and 6-10 day precip is below.
ARC still cautions against chasing rallies and breaks, and no new sales are advised ahead of a growing season amid still-lofty fund short positions.