Texas markets

The pace of wheat sowing, the heat wave in India propel the wheat markets; corn and soybeans under pressure from corn belt progress – Agweek

Editor’s Note: Catch Randy Martinson every Friday after markets close on the Agweek Market Wrap at agweek.com.

Cereals closed out the first week of May, mixed with wheat posting strong gains while corn and soybeans struggled. Weather continues to be the main factor, as cool, wet conditions in the Northern Plains prevent growers from going to the field, while in the Southern Plains, hot, dry conditions have reduced the potential size of winter wheat harvest. Corn and soybeans were pressured by favorable weather forecasts. The forecast is for the central and eastern maize belt to experience hot and dry conditions until mid-May, which should allow plantings to progress at a rapid pace.

Wheat was also buoyed by news that India just had its hottest March on record, which baked its wheat crop. India was expected to be the placeholder for lost Black Sea wheat exports. This may no longer be the case as the Indian crop has started to deteriorate.

Minneapolis wheat was able to hit a new high in most contracts, while Kansas City only saw new highs in the delayed months. Again, slow plantings and the expectation of more rain supported Minneapolis while the potential for increased export demand helped Chicago. Bad weather on the southern plains supported Kansas City.

The start of the second week of May saw a small planting window open in parts of the northern plains, but it was quickly closed due to another soggy rain system. The northern Plains and western Corn Belt experienced rains over the weekend of May 8-9 that extended into Monday. Another system moved in on May 12 that was expected to produce 1 to 2 inches of rain in parts of Minnesota, North Dakota and South Dakota. This will push planters out of the fields until around May 18-20 if realized. This brings the Northern Plains closer to the last day of crop insurance corn planting (May 25 for most North Dakota counties). The central eastern corn belt saw good progress over the weekend, which is why corn and soybeans traded defensively.

The May 9 Crop Progress report helped give the market some strength to start the week, but open week guidance limited gains. Most know that growers can put in the harvest in a relatively short time. With fairly good conditions, growers were able to plant 40% of the corn crop in one week. But that’s when the conditions are favorable. So far this year, there have not yet been favorable weather conditions. This was confirmed in the report, which showed a much slower pace of planting than expected by the trade.

As of May 8, 22% of the country’s corn was planted against expectations of 25% and 50% on average. This is the slowest maize planting progress in nine years. Soybean planting progress was estimated at 12% against expectations of 16% and 24% on average. This is the slowest planting rate for soybeans in three years. The progress of spring wheat sowing is estimated at 27% complete against expectations of 28% and 47% on average. This is the slowest spring wheat planting progress in 11 years.

Winter wheat conditions improved last week due to rains over much of central and eastern Kansas. Winter wheat conditions improved from 2% to 29% good/excellent. Colorado crop dropped 1% to 11% good, Kansas crop improved 3% to 28% good/excellent, Montana crop increased 1% to 13% good/excellent. Oklahoma crop improved 3% to 20% good/excellent, and Texas crop dropped 1% to 7% good.

Wheat and canola also received a boost in Statistics Canada’s stocks report, which was released May 7. The March 31 stock estimate put all wheat stocks at 10.1 million metric tonnes, which was lower than expected and the lowest estimate since 1989. Canola stocks were estimated at 3.94 million metric tons, the lowest estimate since 2005 and a record high.

On the global front, Informa cut its Brazilian corn production estimate by 3 million metric tons to 115 million metric tons from the USDA’s latest estimate of 116 million metric tons. Safras cut its estimate of Brazilian soybean production by 2.8 million metric tons to 122.3 million metric tons against a USDA projection of 125 million metric tons. Informa also estimates Russian wheat production at nearly 82 million tonnes compared to 75 million tonnes last year. They also estimate Ukraine’s wheat production at 16.5 million metric tons compared to 33 million metric tons last year.

The USDA released its estimates for May agricultural production and global agricultural supply and demand on Thursday morning not only for the 2021 crop year but also for the 2022 crop year. It was the first real look at the USDA on 2022 projections. This report came after this column’s deadline, but early estimates called for lower corn and soybean stocks due to expectations of higher demand and higher wheat stocks. due to a decline in exports.

The USDA was to use planted acreage estimates from the Prospective Planting report and the yield trend line. A big question before the release was whether the USDA would lower potential yield estimates due to late planting, but it seems a bit early to play that card.

Cattle ended the first week of May on a mixed note, with live cattle ending the week fairly flat while feeder cattle posted gains. Live cattle were under pressure from a disappointing cash trade. The strength of the feeder cattle market and record export reports in March helped keep live cattle from posting losses. Feeder cattle were supported by the lower grain complex.

Economic worries put cattle under pressure at the start of the second week of May. A sharply declining stock market combined with high inflation continues to limit domestic beef demand. The amount of disposable income for the average consumer continues to decline due to gasoline prices hitting new highs almost daily and the Fed raising interest rates by 0.5%. The cattle have a friendly attitude as supplies are only getting tighter.

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