Morning Highlights


Highlights

  • Corn, soybeans and wheat all gapped higher to start to the overnight session after a bullish crop progress report was released after the close yesterday.
  • Weather forecasts call for more rain to fall over the next seven days across much of the Corn Belt with heavier amounts expected in the southern and eastern portions.
  • Outside markets shows the mini-DJIA futures at 25,171 down 198, Dollar Index at 97.880 up 0.038, and crude oil at $57.28 down 1.88.
  • China has warned rare earth minerals, of which they produced 78% of the world’s supply in 2018, could be used as a tool in the trade talks with US as they are used in materials from iPhones to military weapons.

 Corn

  • Corn gapped higher overnight again by 9 cents on the July to levels not seen since May of last year.
  • Crop progress report came in at 58% planted vs. expectations of 63% complete and the 5-year average of 90%. 58% planted is the slowest on record for this time of year and it leaves 39 million acres to plant based on the March prospective plantings estimate.
  • Notable delays are in Illinois where only 35% is planted vs. the 5-year average of 95%. Other states with substantial delays include Indiana, Ohio, Michigan, and South Dakota.
  • December 2019 corn reached $4.5375 overnight, a price not seen on the December contract since July of 2015. It might entice folks to risk planting corn well beyond insurance dates.

 Outlook:  Higher on wet conditions and planting delays.

 Oilseeds

  • Soybeans gapped higher after the crop progress report showed planting still well behind average.
  • Soybean planting pace was at 29% vs. expectations around 30% and the 5-year average of 66%. Illinois is 14% complete vs. 70% average, Iowa is 32% complete vs. 77% average and South Dakota has 6% done vs. 64% average.
  • Most states had minimal gains in planting week over week as farmers that were able to plant, planted corn to ensure they got it in prior to the final planting insurance dates.
  • Chinese soybeans were 34.25 cents higher, settling at 3697 yuan per ton. Soymeal was 9 cents higher settling at 2903 and soyoil was 80 cents higher settling at 5508 yuan per ton.
  • Malaysian palm oil was 56 cents higher, settling at 4482.

 Outlook: Higher on wet conditions and planting delays.

 Wheat

  • Wheat futures gapped higher overnight as crop conditions finally dropped in yesterday’s crop progress report.
  • Conditions dropped 5% on the good to excellent categories. Notable drops in conditions were Oklahoma down 15% in G/E, Kansas down 5% G/E and South Dakota down 13% G/E.
  • Excessive rain and severe weather are threatening the quality and total production of winter wheat not only in the Southern plains but also in the soft red winter wheat areas of the eastern Corn Belt into the delta.
  • Jordan has tendered for 120,000 MT of wheat.

 Outlook: Higher on wet conditions and spillover strength from corn.