Well, it certainly could have been worse. While still lower on the day, grain and soybeans markets witnessed the harshest of the selling in the early rounds yesterday and by the time closing bell was rung, each was trading around the highs for the session. In fact, wheat had bumped up enough to fill the opening gap lower and now during the overnight hours, corn has done the same. Beans? Well, beans are still another story, but even here we are well above the extreme lows of yesterday. I have commented many a time in the past that markets almost always find their lows when everything looks the worst, the challenge, of course, is knowing when that is. I will continue to maintain we are at or at least in the larger picture close to that scenario, so now is not the time to panic. I would encourage subscribers to read the extra cycle/technical update on corn and beans that we published yesterday.
I suspect the fact that the Chinese, who are scheduled to come to Washington to resume talks on Wednesday, have not changed any plans. They seem to have brushed aside the weekend tweets promising to maintain their “composure” and stating that it is “normal to have disagreements in talks.”
No doubt the planting progress, or lack thereof, that was confirmed yesterday has also helped to cheer the few remaining longs in the corn market. Up to this point, statistically we were running at the same corn planting pace as a year ago, but as expected, we really lost ground (no pun intended) last week. As of May 5th, we have 23% of the corn planted, compared with 36% a year ago and 46% on average. Not only does this open the possibility of losing some acreage to other crops, now the discussion of losing optimum yield potential comes into the equation. Iowa was the one major corn states that was the exception to the rule as they reached 36% planted, which was comparable to a year ago but still 15% behind average. We Illinoisans are at just 10% versus a norm of 66%, Indiana at 3% instead of 35% and Minnesota a whopping 6% versus 42%.As expected, trade surveys for the upcoming May crop report have begun to filter in and breakdown as follows; US corn production for this year, 14.841 billion bushels derived from an average yield of 175.3 bpa. Beans production is estimated to come through at 4.1985 billion from an average yield of 49.8 bpa, and total wheat is expected to tally 1.910 billion, of which 1.277 billion will be winter wheat. For ending stocks figures, in corn, the trade is expecting 2018/19 stocks of 2.058 billion and 2.132 billion for the 2019/20 crop year. In beans, the average estimate for 2018/19 is 923 million and then for 19/20, 925 million. Old crop wheat is expected to come in around 1.096 and then slip to 1.060 for 2019/2020. Looking at South American, the average estimate for the Brazilian crops put beans at 117 MMT and corn at 96.7 MMT. Argentine beans are estimated to be 55.7 MMT and corn 48 MMT. Last but not least, global ending stocks estimates for 2018/19 have corn at 315.7 MMT, beans at 108.75 MMT and wheat at 276 MMT and for 2019/20, 305.75, 110.2 and 277.3 respectively.