Concerns growing for delayed corn planting, CONAB raises yields

This morning, A mixed grain trade with corn firmer while wheat retreated and soybeans softened as CONAB raised their bean crop by 1.16 MMTs to 147.68 MMTs (USDA 154 MMTs as of last Friday). Corn production was raised from 111.64 MMTs versus 110.96 MMTs last month. Meanwhile, concern grows about the absence of China from the market for new crop positions on beans. As of May 2, China has purchased no beans for the 2020/25 delivery window. A year ago, at this time, China had already secured 32 million Bu of soybeans for new crop arrival despite a record Brazilian crop.

The wheat/corn spread is over $2.10 this morning, a level only achieved 5% of the time during the past 10 years, according to Peak Research. This indicates traders’ concern for global wheat supplies. India’s government wheat stocks reported on May 1st were down -10.3% year-on-year, the lowest since 2008, following two poor harvests. The southern Russia forecast keeps meaningful precipitation away from the major winter wheat/barley growing areas until later in the month. This week, the Wheat Quality Council tour of the Plains will be compared against NASS’s initial HRW yield projection in May.

Crop Progress reporting showed US corn planting at 49% complete vs. 60% last year and 54% on average, while soybean planting was 35% complete vs. 45% last year and 34% on average. Winter wheat conditions were unchanged at 50% G/E.

There will be widespread rains over the far Eastern Plains, Midwest, and Southeast next Tuesday/Wednesday, with accumulations of 1.75-4.00″ offered to Eastern NE, IA, W IL, WI, and MI. Corn seeding was 55% complete in NE, 42% in IL, and 57% complete in IA; all were below average. This is not comparable to 2019, but a sizable portion of the US corn crop will be planted after May 20 which keeps focus on soil moisture and temps into the very final days of July.

Brazil continues to have unwanted soaking rains of 3-8″ in the Río Grande do Sul, where the full repair of infrastructures is being pushed back into late May/early June. 16% of summer corn and 21% of soybeans have yet to be harvested in RGDS. Also, the Black Sea forecast keeps rainfall confined as far as W Russia through May 24, and there are hints that following recent freezes, high temps in Ukraine/S Russia will return to the upper 70s and 80s beyond May 22. Weather outside of the US is far from ideal which is making it a brighter prospect for improving US wheat and corn export outlooks.

Live and feeder cattle futures closed lower yesterday, at the low end of the trade that was higher in the morning. This continued the pinball oscillation with a lack of direction. Negotiated fed cattle markets are hopeful of steady better trade this week from the rally in box beef prices yesterday, showing Choice gaining $4.38 back to $2 90.95 and Select rising $3.01 to $2 87.18. Seasonal demand looks to pick up the Memorial Day weekend in two weeks. Last week the negotiated sales volume fell to a three-week low at 83,747 head, with 58,294 head for 1-14 day delivery and 25,453 for 15-30 day delivery. August cattle must maintain support on any attempts to challenge 171.00 on the continuation charts.