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GRAIN MARKETS: Weather forecasts weigh on crops

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Corn and soybean futures started the week lower following clear planting weather in Iowa this past week and forecasts for similar weather next week for much of the Midwest.

Wheat futures also finished lower on Monday as traders await winter wheat condition ratings later today and spring wheat planting.

Winter wheat grabbed much of last week’s headlines as traders awaited damage reports from the snowstorm a week earlier. The Commodity Futures Trading Commission report on Friday showed a wave of fund short covering early last week, but that later turned to selling.

The U.S. Department of Agriculture’s monthly crop report comes out Wednesday, and Farm Futures expects reductions in corn and soybean ending stocks and an increase in the wheat stocks. A Reuters survey of analysts averaged small increases for corn and wheat stocks and a decrease for soybeans.

Wall Street was a little lower when the crops closed, with the Dow Jones Industrials down about 6 points as investors were relieved centrist candidate Emmanuel Macron won the French presidency.

Export highlights (from USDA and Reuters):

– USDA export inspections estimates (million bu.): corn 28.4 (35-47), soybeans 12.8 (13-22) and wheat  22.6 (12-22).

– Algeria is tendering to buy 50,000 metric tons of optional-origin milling wheat. The tender deadline is Wednesday, and shipment is for July.

– Jordan seeks to buy 100,000 metric tons of hard milling wheat and 100,000 mt of feed barley, both from optional origins. The wheat deadline is May 16 and barley May 17. Both are for October-November shipment.

– Taiwan seeks to buy 95,750 metric tons of U.S. wheat for June-July shipment from the Pacific Northwest. The tender closes on May 9.

– Iraq seeks to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes May 7.

Corn futures closed about 5 cents lower and near a one-week low as weather forecasts indicate that farmers should soon be back in the fields.

Farm Futures expects about 48% planted in this afternoon’s crop progress report, while wire surveys favor 44%. A year ago the five-year average was 50%.

Planting advanced in Iowa during the dry weekend there. Central Illinois fields were wet, and some grain dealers said it may be later this week before planting resumes. The 6- to 10-day outlook (May 13-17) is dry and cool for the Midwest.

The Chicago Board of Trade’s (CBOT) estimated volume for Monday was 231,784. Friday’s actual volume was 297,855. Open interest in Friday’s higher market decreased by 10,776 with May’s down 439 and July’s down 14,312.

May corn closed down 5 at $3.56-3/4, July down 4-3/4 at $3.66 and new-crop December down 4-1/4 at at $3.84-1/4.

What to Look For: Traders await USDA’s report on Wednesday, with Farm Futures expecting 2016/2017 ending stocks at 2.3 billion bushels and 2017/2018’s at 2 billion.

Soybeans closed lower for the third straight session with the July finding support at the 20-day average but under other key averages.

Analysts expected 16% to 17% of the crop to be planted in the Monday afternoon USDA report. A year ago the five-year average was 16%.

Weekly export inspections of 12.8 million bushels were down from a week and missed trade forecasts, but the drop occurred when high water last week halted navigation on the Mississippi River near St. Louis, Mo. The Coast Guard on Monday said navigation should resume there today.

CBOT has a force majeure on loadings on the Illinois River because of high water and flooding.

CBOT estimated Monday’s volume at 135,461. Friday’s actual volume was 180,475. Friday’s open interest decreased by 1,014 in the lower market with May’s down 174 and July’s down 3,737. November’s open interest increased by 594.

May soybeans closed down 6-3/4 at $9.56-1/4 per bushel and July down 8-1/4 at $9.64-3/4. New-crop November closed down 5-1/4 at $9.61-1/4.

What to Look For: Relief selling was noted on Monday after market-favorite Macron won France’s presidential election was favored to win. Farm Futures expects USDA on Wednesday to put ending stocks at 430 million bushels, down from April 445 million. The average in the Reuters survey was 438 million.

Wheat markets closed lower as traders awaited damage reports from Kansas.

Spring wheat had some of the biggest losses in Monday’s trading as dry forecasts should aid planting in the northern Plains.

The Plains also should be warm and dry next week, which would help in HRW wheat’s recovery. Farm Futures expects winter wheat at about 53% good/excellent later today, while wire surveys have about 51%.

Since the short covering gains early last week, winter wheat markets have retreated to within 3 to 7 cents of pre-storm levels.

CBOT estimated Monday’s volume at 102,242. Friday’s actual volume was 99,246. Open interest on Friday decreased by 1,786 in the higher market with May’s down 44 and July’s down 2,367.

Chicago’s May soft red winter wheat closed down 9-1/2 at $4.18 and July down 8-3/4 at $4.33-1/2. Kansas City’s May hard red winter wheat dropped 5-1/2 to $4.32-1/2 and July dropped 5-3/4 to $4.44-1/4. Spring wheat for May fell 9-1/4 to $5.32-3/4 and July dropped 9-1/2 to $5.44-3/4.

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