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Afternoon Market Recap for May 21, 2018

Easing trade tensions help soybeans surge.

Rain in the Plains sinks wheat prices while corn treads water

U.S. Treasury Secretary Steven Mnuchin declared the U.S.-China trade spat “on hold” after the two countries appear to drop tariff threats for now (although some are skeptical the truce will last). The move launched soybean prices more than 2% higher to start the week, with corn prices treading water and wheat prices dampened by rains on the Plains.

More rainy weather is in store for much of the central U.S., according to the latest three-day precipitation forecasts. Midwestern temperatures are mixed to start the week, but seasonally warm temperatures are probable later in the week.

Looking further ahead, NOAA’s three-month outlook for June through August calls for plenty of above-average temperatures in the South and West, with the Midwest likely to see “normal” conditions during this time.

A possible U.S.-China trade war truce also had Wall St. optimistic, with the Dow up 280 points Monday afternoon to 24,995. Energy prices continued to find traction, with crude oil and gasoline prices each up more than 1% in early afternoon trading. The U.S. Dollar firmed slightly.

 

Corn prices moved fractionally higher Monday, with positive export news and fast planting expectations basically cancelling each other out. July and September futures each added 0.25 cents to close at $4.0275 and $4.1125, respectively.

Corn basis bids were largely steady but did pick up 2 cents at a Nebraska elevator.

Ahead of Monday afternoon’s USDA Crop Progress report, a group of industry analysts estimate the agency will declare 80% of the U.S. corn crop planted as of May 20. That includes a 77% estimate from Farm Futures, which routinely participates in these surveys.

Corn export inspections reached 60.2 million bushels last week, down slightly from the prior week’s performance of 62.1 million bushels but moderately ahead of the same week a year ago (46.4 million bushels).

Mexico was the No. 1 destination of corn export inspections last week, with 13.3 million bushels.

Catch up on the latest farm chatter in the newest edition of Feedback from the Field, where rain delays are on more than a few minds. Check out planting progress and other farmer insights on the interactive map.

Ukraine’s 2018 planting season is wrapping up, as the country reaches 93% completion. This year, Ukraine will plant approximately 11.4 million acres of corn. The country’s UkrAgroConsult has raised its 2018/19 grain forecasts by 1.5% based on higher expected corn production.

Preliminary volume estimates were for 232,568 contracts, falling 27% below Friday’s final count of 319,121.

 

Soybean prices grabbed big gains to start the week, optimistic that trade conflicts between the U.S. and China could soon wind down. July futures spiked 26.75 cents to $10.2525, while August futures gained 26.5 cents to $10.29.

Soybean basis bids trended steady to slightly lower amid the big futures gains, meantime.

Analysts estimate the U.S. soybean crop is now more than half planted, reaching 54% complete last week. That’s solid progress from last week’s Crop Progress report from USDA, at 35% complete.

Last week’s soybean export inspections reached 32.8 million bushels, which was well ahead of trade expectations (14 to 25 million bushels), the prior week’s results (25.7 million bushels) and this week a year ago (12.1 million bushels).

China was the No. 1 destination for soybean export inspections last week, but only accounted for less than 15% of the total, with 4.9 million bushels. (Pre trade “spat,” it routinely accounted for more than half of soybean inspections for any given week.) 

Preliminary volume estimates were for 185,504 contracts, slightly below Friday’s final tally of 194,826.

 

Wheat prices started the week in the red after traders digested rainy forecasts for the U.S. Plains. Winter wheat prices dropped more than 2% Monday, with July Chicago SRW prices down 11 cents to $5.0725 and July Kansas City HRW prices down 12 cents to $5.2675. Spring wheat prices took a more moderate hit, with July MGEX prices dropping 7.25 cents to $6.21. 

For the week ending May 20, a group of industry analysts estimate spring wheat planting is now 79% complete.

Analysts also estimate that 37% of the U.S. winter wheat crop is in good-to-excellent condition, up 1% from the prior week but significantly behind 52% at this time last year.

Wheat export inspections were just 12.5 million bushels last week – on the low end of the average trade guess, which ranged from 11 million to 22 million bushels. It was also down from the prior week’s tally of 17.2 million bushels and totals of 25.2 million bushels a year ago. South Korea was the No. 1 destination, with 3.4 million bushels.

Preliminary volume estimates were for 145,122 CBOT contracts, down 12% from Friday’s final count of 165,498.

Corn Outlook

Soybean Outlook

Wheat Outlook

 

 

 

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