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My, what a difference a week can make. We have rapidly moved from a behind average planting/crop development pace to one of average to above average. As of this past weekend, corn planting stood at 62%, up 23% for the week and now just 1% behind average. I should note that after the huge storms that have crossed the Midwest of over the past few days, it may be more correct to say the first planting of the crop as undoubtedly there will be replant. The upper Midwestern states such as Minnesota and the Dakotas remain off the pace, which if nothing changes could lead to concerns of frost risk, but obviously everywhere else has made up the slack. Looking at the two big I’s, Illinois is 20% ahead of normal with Iowa 5% behind. Note as well that emergence at 28% is 1% ahead of average. Beans pushed even further ahead of pace and now stand at 35% complete versus the average of 26%. Emergence also outpaced the average and stood at 10% compared with the normal 6%. The one crop that still lags the normal is spring wheat which has reached 58% complete vs. 67% on average, but even here we witnessed a jump of 28% for the week. Oh, and I should not forget barley, which is now at 62% planted versus the normal 74% and is keeping beer drinkers on pins and needles.
Just when you think you have heard the lowest estimates for the Argentine crops this year, the number is trimmed again. In his weekly update, Dr. Cordonnier has lowered his estimate another million tonnes to 37 MMT. According to the Buenos Aires Grain Exchange, bean harvest in that nation is 66% complete, which was only a 5% increase during the past week due to now excessive moisture. Weather can be awfully cruel at times. He left the corn estimates unchanged for the nation, albeit with a slightly lower bias and also left his estimate for Brazilian production unchanged.
The weather certainly has not been the only cruel thing befalling Argentina this year as it would appear that the countries financial situation has gone from bad to worse. As I have reported previously, the Marci government pushed interest rates from 25% to 27.25% to 33.25% and eventually 40% all in early May in an effort to prop up the Peso and attract funding. The problem is, it would not appear to have been very effective as the Peso has been in free fall throughout the month, losing over 18% just in the past 10-days. Last week the Argentine government approached the IMF about securing additional funding, and while that could help reassure investors, a falling Peso does not nor does the falling bond market. The 100-year bond has now fallen below 86. Note I did say “100-year” bond. Of course, domestically this also presents a number of problems as not only are the citizens losing buying power, they are losing faith in the Macri government, who up to this point at least they have stood behind. 2018 will not have been a banner year for this nation.
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