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Morning #Grain Comments, #Corn, #Soybeans, #Wheat

by | Apr 29, 2019


 

-Wet corn belt forecast supports corn
-Funds record net short in corn and soybeans
-Record Brazilian safrinha corn crop eyed
-First notice day for May deliveries tomorrow
-Wheat tour this week
-EU rapeseed crop ideas lowered
 
A rather wet corn belt forecast (details below/maps on following page) supported corn overnight and looks to set the early tone for the week. Continued favorable HRW weather is keeping wheat prices in check, while soybeans were slightly higher with corn overnight, as well. This afternoon’s Crop Progress report will be interesting reading to see how aggressive corn planters were able to roll in the western corn belt last week. Some ideas indicate US-wide planting could be around 15-20% complete vs the 5-year average around 27% and last year’s 15% at this time. Energies are mostly slightly lower this morning.
 
 The U.S. Wheat Quality Council’s annual wheat tour gets underway today.
 Strategie Grains lowered their estimate of the EU rapeseed crop to a 12-year low of 18.85 MMT, down from their previous estimate of 19.32 MMT and last year’s 20.0 MMT. Estimated rapeseed area was lowered to 5.73 million hectares (14.15 mil acres) from 5.84 mil hectares (14.43 mil acres) and is down nearly 17% from last year’s 6.89 mil hectares (17.03 mil acres).
 A wire service survey of various Brazilian ag consultants/participants indicated average expectations for this year’s Brazilian safrinha corn crop at 68.43 MMT, a new record, and up sharply from last year’s 53.90 MMT. Ideas ranged from 64.5-72.2 MMT. The current record crop of 67.4 MMT was achieved two years ago.
ï‚· First notice day for May deliveries is tomorrow. Heavy soybean deliveries are expected.
 Friday’s CFTC Disaggregated COT data for futures/options combined for the week ended 4/23/19 showed continued fund selling across the ag complex and pushing net shorts in corn and soybeans to new all-time records. Funds were net sellers of 38k contracts in soybeans for the week, hitting a new record net short of 129.6k contracts, while selling of 14.7k contracts in corn extended their net short further into record territory at 322.2k contracts. Funds were also net sellers of 16.7k contracts in SBO (net short 50.6k), 7.9k SBM (net short 19.4k), 4.9k CBOT wheat (net short 68k), and 2.1k MPLS wheat (net short 12.6k). Funds were minor net buyers of 0.6k contracts in KCBT wheat and remain heavily net short 53.7k contracts.
ï‚· ADM said they are considering a spinoff of its ethanol production given the ongoing difficult environment in the industry of depressed margins and excess domestic supply. ADM is reportedly creating an independent ethanol subsidiary including their dry mill operations in Columbus, NE, Cedar Rapids, IA and Peoria, IL which will allow for spinoff options of that business.
ï‚· Saudi Arabia bought 620k tonnes of optional origin wheat for July-Sept arrival at an average price of $233.72/tonne c&f following their latest tender.
ï‚· Canadian ag product exporters are saying issues with shipping various products to China are getting more difficult with inspections/approvals for soybean unloading now taking as much as three weeks vs a few days typically and many Chinese importers are now refusing to buy Canadian soybeans given the recent increased difficulties. Other products such as pork and peas have said to be impacted, as well, as the unofficial trade dispute following the arrest of a Huawei Technologies executive continues to escalate. 

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