Grains found mild support overnight after a limit move in the corn market on Monday pushed prices to their highest level since the March 28 Stocks report. Corn was up 2 cents a bushel, while soybean prices were up 5 cents a bushel. Wheat prices came under pressure, losing 6 cents.

In corn, USDA planting progress report showed only 5% complete, just 1% higher from a week ago.  This matches the slowest since 1984, when farmers also had completed just 5% of their corn planting and in that year acreage fell 2% from the USDA’s March Planting Intentions report. However, growing season weather is still the biggest driver for final yield but for the near-term traders will likely react with a bullish bias to the planting delays occurring. Looking at the weather, heavy rainfall and snow are expected this week across the western U.S. Midwest and eastern Plains. There is a big storm system starting Tuesday which will spread in intensity and coverage by Thursday and linger into the weekend. As a result, planting should continue to be stalled which should remain supportive for the corn market.

For wheat, the Wheat Quality tour kicks off today in Kansas and continues through Thursday. Kansas State agronomist Jim Shroyer said to the tour participants that Central Kansas looks pretty good thanks to spring precipitation but he expects to  see freeze damage in some south-central areas around Great Bend, KS, including Pratt, Barton and Rice counties. He noted that in western Kansas, west of Jetmore and Quinter, KS, the wheat goes downhill in a hurry and speculated that some fields will not be harvested. Shroyer said that area of Kansas reminds him of 1989, when the state’s winter wheat struggled after the big U.S. drought of 1988. Internationally, South Korea purchased 48,900 MT of U.S.-origin milling wheat.

For soybeans, export business continues to remain quiet while domestic crushing plants bid up basis levels to draw out beans from farmers. A key processor in Decatur was up 10 cents on basis on Monday.

Corn was up 10 cents a bushel on the overnight session as wet weather continues to plague corn planting. Soybeans found modest support posting a 2-cent gain while wheat was up 6 cents a bushel.

In corn, planting delays are starting to get the attention of the market as last week’s slow pace of only 4% planted combined with a wet and cold weather outlook for this put added pressure on getting the crop planted in a timely fashion. Weather models show a prolonged major rain event is likely to affect most of the Midwest, as well as the eastern portions of the central Plains over the next several days, with coverage around 75% over these areas and the rainfall amounts range from 1-4 inches. USDA’s planting progress report this afternoon is likely to show limited sowings of 8 to 10%.

In wheat, the Wheat Quality tour begins this week which should provide key information on the state of the hard red winter wheat crop in Kansas and parts of Oklahoma. Early season drought along with severe cold snaps in the past month has likely put the crop below par but the extent of the damage remains unclear. Over the weekend, Egypt announced that they may reach 70% self-sufficiency in wheat production this year because of an expected boost in the local harvest. Egypt usually imports around 10 MMT of wheat a year but this year the state says it will buy only around 4 to 5 MMT from abroad, hoping to get the rest from local production.

For soybeans, near-term demand from domestic soybean crushers has helped keep nearby prices moving higher. Last week, crushing plants saw an average 4-cent gain in basis while the rest of the soybean buyers posted a 3-cent loss on average. However, new-crop beans may see more pressure as corn planting delays could signal more soybean acres as farmers switch from corn to beans.

It was a tale of two markets this week in the cash soybean market.  Domestic end users were sharply lower on basis as soybean crushing plants begin to cut back production in anticipation of future lower prices, while river markets continue to be bolstered by strong international demand. For the week, U.S soybean basis fell 5 cents a bushel while corn basis continued to tow the line at unchanged.

In the corn market, sluggish export demand keeps basis levels stagnate although still mostly holding up at lofty levels. Ethanol processors did bid up basis this week by 1-cent a bushel on average as ethanol processing margins continue to hold up at their highest levels of the marketing year. However, at the Gulf spot corn basis was unchanged as US export business continues to be non-existent.   Basis levels at river terminals averaged a 1-cent loss.

For soybeans, the average US spot soybean basis was down by 5-cents a bushel, but this masked the divergence across the two key sectors. At the Gulf, export basis levels bucked the broader trend which helped push basis levels along the lower river system higher. Upper river terminals are starting to run into flooding issues which is beginning to cause some stoppages of deliveries and limiting basis gains there. For crushing plants, double-digit losses in the Eastern Cornbelt were fairly widespread, while Western processors were down only slightly or even stronger. 

 Soybean prices found buying strength overnight as nearby May futures climbed 14 cents helping recover some of the steep losses from Monday’s session. Corn and wheat prices were up fractionally in the overnight session.

On Monday, USDA’s first planting report for the corn crop showed only 2% of the crop planted  as cool temperatures and storm systems continue to delay the planting season for most farmers.  Normally, 7% of the crop has been planted by this time. The outlook for the remainder of the week shows continued cold. In Iowa temperatures are not expected above 60 degrees in the 5-day outlook with rains likely on Wednesday and Thursday, keeping planting limited for the next week. Weekly export inspections of 14.7 MB were in line with the expected 10-16 MB, but still lag the pace needed to hit USDA targets for the season.

For winter wheat, crop conditions were unchanged on average for the week with 36% of the crop in good to excellent condition. However, recent freeze damage in the Plains has yet to be fully assessed and producers are starting to make decisions on abandonment of the crop. Kansas is likely to get hit by another hard freeze as temperatures are expected in the low 20s on Thursday.  

In soybeans, weekly soybean export inspections were poor at 4.8 MB versus the expected 12-17 MB Bird flu continues to be a problem in China as there have been 63 human cases reported with 14 human deaths. A Bloomberg survey estimated 2013 Chinese soybean imports may fall to 58.0 MMT due to bird flu. The March NOPA crush came in at 137.08 MB, versus 136.3 MB in February and trade estimates of 136.8-140.0 MB.  Safras e Mercado said that the Brazilian soybean harvest is 82% complete versus 76% a week ago, 85% a year ago and the 5 year average of 78%.

Grains were mixed in overnight trade with corn posting a 5 cent advance while wheat and soybeans had modest declines of 2-cents a bushel.

In the wheat market, US winter wheat conditions improved this week as USDA’s crop condition rating showed 36% of the crop in good-to-excellent condition, versus last week’s reading of 34%.  However, current ratings are still well below last year’s rating of 61% and on par with ratings in 2011 when wheat yields ended up at 43.7 bushels per acre on the US average as compared to 46.3 in 2012. Internationally, wheat crops in Russia and Ukraine are also starting to show stress. Russian analyst SovEcon said crop conditions there fell in the last week, and although they are pegging the crop to be 83 to 89 MMT, up from last year’s tally of 71 MMT, it is well below official forecasts from Russia's agriculture ministry at 90 to 92 MMT.  Agriculture consultancy UkrAgroConsult on Tuesday cut its forecast for Ukraine's 2013 wheat harvest by 4 percent to 20.23 MMT due to a lower-than-expected yield caused by a late spring.

In corn, weekly export inspections cam in art 10 MB well below last week’s 19 MB and the lowest in 7 weeks. But, lower prices especially for new-crop corn have some industry analysts looking for resurgence in export demand.  Chinese corn imports are expected to reach between 6-7 MMT in the 2013/14 marketing year beginning Oct. 1, according to estimates by three major industry analysts, surpassing a previous record of 5.2 MMT in 2012/2013. So far, China has already booked 1.3 MMT of US new-crop corn. USDA’s April WASDE report to be released on Wednesday is expected to show ending stocks at 812 MB up from 632 MB last month after the higher stocks report last week.

For soybeans, weekly export inspections came in at 15 MB off slightly from last week’s total of 16 MB. However, with total exports already standing at 1,192 MB it will only take about 7.3 MB per week for the remainder of the year to reach USDA’s annual projection of 1,345 MB.  While bean prices rallied hard on Monday as concerns about China’s bird flu waned, overnight trading was weaker on thoughts feed demand could be slowing. New Hope Group, China's largest animal feed producer, said that its business had indeed been hurt by the bird flu outbreak as poultry consumption in China has taken a hit. Also, the Chinese Grain and Oilseed Information Center expects Chinese soybean imports for 2012-13 to fall for the first time in 9 years.