Wheat Tour Expected to See Drought and Winterkill Impact
Apr 29, 2014
Grains were mixed in the overnight session with corn and beans posting modest 4 and 2 cent gains, respectively, while wheat gave up 3 cents in the night trade.
Corn got a lift from Monday’s planting progress report which showed 19% of the US crop had been planted, slightly below expectations of 21% by market analysts going into the report. Wet weather is hampering some of the progress with rains of 1 to 3 inches this week expected to slow plantings in the North Central and Upper Midwest. Monday’s export inspections report for corn showed 1,156,332 MT of exports for the week, below trade expectations which ranged from 1,400,000 MT to 1,650,000 MT. The US still has a large amount of corn left to ship based on total commitments. As of last week’s export sales report, the US has 16.5 MMT still left to ship of the total 43.1 MMT commitments to date, or 38% of overall commitments. That implies about 900,000 MT of weekly shipments needed for the remainder of the marketing year to satisfy what is already on the books, at a time of the year when exports are typically lower.
In soybeans, prices continue to seesaw back and forth. Monday saw early gains of 20 cents a bushel on front month May futures get wiped out but May continues to trade above $15 with first notice day coming up tomorrow. Soybean exports came in strong for this time of year with 254,299 MT exported for the week versus trade expectations of 100,000 to 200,000 MT. US soybean plantings came in at 3% this week, the first report of the season and on par with what analysts had expected.
In wheat, the Kansas wheat tour will kick off today. Tour leader Rollie Sears from Syngenta said this year's Kansas hard red winter wheat is at a similar stage of development as last year, which is about 2 weeks later than normal. He noted there is probably more winterkill than we have seen in many years. However, he cautioned at this time of year, the wheat plant is as tough and resilient as it’s ever going to be. It has great capacity to recover. It’s difficult to look at crop and get a picture of what yield is going to be. In export news, Argentina announced they will allow another 500,000 MT of exports. While their wheat is fairly high priced compared to the US, they still may capture some business from Brazil, which could take a bite out of US HRW wheat sales to that country.