Markets are called better this a.m. behind an overnight session
that saw a small bounce.
Corn was up 4-7 cents in the overnight session, KC wheat was
up 4, MPLS wheat was up 5, CBOT wheat was up 3 cents a bushel, and Soybeans
were up 3-6 cents a bushel. Outside
markets have a very strong US Dollar with the Cash index back above 82.05,
crude is up about 40 cents a barrel, Gold is up about 20 bucks an ounce, and
stock market futures are pointing to an up 40-50 point start for the DOW.
First thing that sticks out and has for a while is the price
action of the grains and the price action of the US dollar. Yesterday the US dollar was down which means
that our commodities would be cheaper for other countries thus in theory our
grains should have seen some support.
This a.m. the dollar is up strong which means our product should be more
expensive when looking to export it and thus that should spill over a little
weakness to our grains. But that correlation
hasn’t been very good for some time. It
is something however that we need to keep in mind should a risk off global
event happen the US dollar is still likely the best of the worst and a stronger
US dollar won’t help out our demand.
The other thing that stood out this a.m. is the numerous
pictures of snow in parts of Iowa/MN; seen a couple pictures of what looked like
a good foot of snow. Overall moisture
might be a hair less than the high side of some of the predictions but it does
look like things in many areas east of us will or have come to a standstill. The forecasts as we go forward will continue
to be very important. Optimal planting
date for many that got hit with the recent moisture is the middle part of
May.
This a.m. we did have export sales out and they were overall
good but that was due to new crop sales.
Soybeans actually had another net old crop cancellations or negative
number again this week (-4 million bushels)…..but the new crop sales were huge
at 49.3 million bushels.
Corn came in at 13 million just slightly above what we need
to meet the old crop USDA balance sheet projections. New crop was very strong at 25.8 million
bushels.
Keep in mind that even though both corn and beans had very
strong new crop sales they are still behind last years at this time.
Wheat sales were 18.3 million for new crop which puts their
new crop commitments at 127.6 million bushels versus 68.2 million last year at
this time. Old crop wheat sales came in
at 8.1 million bushels just below what we need on a per week basis to meet present
USDA projections.
Soybean meal sales remain strong; off from the last couple
of weeks but still at 93.3 k tones leaving us needing to cancel about 8.2 each
week to not go over the USDA estimate.
The wheat tour had a day 2 yield estimate of 37.1 bu down
from 43.7 from last year on the same leg of the tour. The tour has OK at just 25.5 bu/acre versus
36 last year and a crop size of 85 million versus 155 million last year. Day 1 had the yield just slightly below last
year. Look for the areas looked at today
to continue the down trend in yield. The
one thing that many on the tour have said is they are using what the yield
potential is and I did see a tweet that mentioned their method is likely to
overstate yields because of where the crop is at. Bottom line is we are not getting quiet as bullish
info from the tour as we would have liked.
Perhaps it will come today? Or
perhaps things are still up in the air a little bit based on what mother nature
does over the next few days/weeks ahead?
The other possibility is that we likely won’t have good info or accurate
info until the combines roll. Harvest
rally set up this year? Could happen
easily if we see a scare for the row crops around the same time.
As we go forward over the next couple of days we need to
watch tour results and weather. Weather
likely being the thing that could easily move our markets.
Please give us a call if there is anything we can do for
you.
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