AgResource Daily Farm Marketing Advice for Friday: 1/ Corn Producers: Forward sell/hedge an estimated 30% of your estimated 2018 corn crop if Dec’18 corn futures reach $4.14.
6:30 AM CST CBOT Prices: July soybeans are down 1.00 cent at $9.7325, July corn is up 2.0 cents at $3.685 while July Chi wheat is up 2.00 cents at $4.3975.
Good Morning! The CBOT has traded mixed overnight with the grains mostly firmer and soy futures slightly lower this AM. The volume of corn trade has been large with more than 22,000 contracts of July corn, 14,000 contracts of July soybeans, and more than 8,000 contracts of July Chi wheat changing hands.
CBOT open interest totals reflects a gain of 18,583 contracts of corn, and a decline of 374 contracts of soybeans and 3,756 contracts of wheat. It appears that funds added to their already large net short position.
For the week, corn is down 1 cent, soybeans are up 15 cents, while wheat is up 10 cents. Considerable emotion from the bulls and the bears is noted in this week’s trade due to extreme weather from Kansas through Ohio.
The CME has placed a force majeure on CBOT May contract deliveries on the river due to all of the flooding.
Traders are awaiting the finding/vote of the US International Trade Commission (ITC) this AM against Argentina/Indonesia on biodiesel dumping. A decision from the ITC has to be rendered by May 8th (45 days after it was presented). An ITC staff report was completed on May 1st and rumored to favor the Biodiesel Board dumping claim. A duty decision could follow if it is not postponed to mid to late summer. There is no timetable of when duty applications have to be completed, but it is expected no later than Aug 30th.
China reduced its Value Added Tax (VAT) on soybeans imported after July 1st by 2% from 13% to 11%. Chinese soybeans crushers have been under pressure on margins in recent months, and the VAT reduction will help. Chinese crushers have imported record tonnages of soybeans since October 1st, and this VAT reduction will maintain that trend. ARC sees China taking a record 90-91 MMTs of beans from all sources compared to the WASDE 2016/2017 forecast of 88 MMTs.
The Kansas Crop Quality Tour pegged the Kansas wheat crop at 281.7 Mil Bu with a yield of 46.1 BPA. The tour reduced Kansas harvested acres by a heady 1.4 Mil acres or 18% due to the widespread cold weather crop losses across the west. This estimate was down 53 Mil Bu from Informa’s forecast and 185 Mil Bu from last year’s harvest. Note that damage assessments cannot be fully made until 14-20 days following the frost/freeze event, and will likely grow.
The Central US forecast maintains the risk of sub 32 degree temps into E IL, IN and OH on Sunday/Monday/Tuesday AM. Any late boot or heading wheat could be damaged. US wheat crop ratings are likely to fall on Monday’s weekly NASS report to reflect the extreme weather of the week.
China sold 91% of its corn reserve offering from the 2013 harvest at a price of $5.085/Bu into its domestic starch and ethanol market.
The May WASDE report looms on Wednesday with US corn planting expected to be just 41-44% completed through Sunday. ARC sees US wheat as undervalued.
