Grain Markets Weak Overnight
Apr 18, 2012
· Grains mixed overnight; Soybeans lower across the board while corn and wheat trade near unch; Corn vs soybean spreads have been under major pressure the last couple of months
· Corn planting pegged at 17% as of last Sunday by the USDA; Some delays seen because of rain, but overall planting is moving very quickly; Illinois 41% planted, Iowa 5%, Indiana 24%, Ohio 10%, Minnesota 7%, Missouri 39%, ND 3%, SD 4%
· Winter wheat rated 64% good-excellent vs. 61% last week; Spring wheat planting 37% complete vs. 21% last week, 5% last year and 9% avg
· Brazil soybean production estimates continue to fall; Oil World looking for 65.0mmt vs. their last guess of 65.5mmt
· Leaf and stripe rust being reported in the Kansas wheat crop by some farmers and crop scouts due to warm weather, we do not believe this to be a major issue at this point
· Weather forecasters looking for a planting window to open this weekend into early next week; Most expect rapid planting progress to ensue
· Corn market approaching technical support on charts; Both nearby and new crop contracts within arm’s reach of recent lows (charts on next page)
· Outside markets mostly negative for the ag complex this morning; US$ higher with crude, metals and equities slightly lower
Despite a crop progress number yesterday that was a little bit below analyst expectations, there is no doubt that corn planting will make a massive step forward in the coming days. Market action is reflecting a crop that will go in quickly and without any major issue. Rains this week were welcome by the vast majority of producers. Subsoil moisture has improved immensely throughout much of the country. Without a bombshell ending stocks figure from the USDA on their May report, the corn market will have a tough time rallying lacking a weather threat.
Soybean prices traded to the lower end of their recent range overnight. Historically, $14 per bushel soybeans has been a difficult price for the market to sustain over an extended period of time. We fully expect beans to gain 1+ million acres from prospective planting to final due to price ratio movement.
As always, call the office with questions or concerns.