Grain markets will close at their regular 1:20pm CT today and will not re-open until Sunday night, April 21st, at 7:00pm CT in observance of Good Friday holiday. In this week’s Crop Progress report, topsoil for the contiguous U.S. is rated 94% adequate to surplus, up 1. Subsoil moisture is also up 1 at 93% adequate to surplus. The new Farm Bill has increased the amounts that producers can borrow through USDA’s FSA. In addition, Congress is debating a disaster aid package that would cover natural disasters that have occurred the past two years; the House version is said to include coverage for stored grain lost in recent floods. Congress will return from recess on April 29th.
The Argentine government made their first estimate of the season on their corn crop at 55 million tons, which would be over 11 million tons above last year’s crop. USDA currently is estimating only 47 million tons, but the Argentina estimate reportedly includes corn for silage. China’s Ag Ministry announced they will begin a possibly year-long review on considering removing DDG tariffs.
USDA reported corn planting progress at 3% complete, up 1 from last week but below the 5% average pace. The weekly ethanol report showed production up 14,000 barrels/day to 1.016 million in the past week. Ethanol stocks dropped 517,000 to 22.68 million barrels. Funds have established a new record large short position in corn futures. The COT report on Friday shows they added over 24,000 short positions to be net short 294.3k contracts as of last Tuesday.
IKAR estimated Russia’s wheat production at 79.5 million tons, 7.8 million tons above last year’s crop. More optimistically, SovEcon raised their estimate of Russia’s wheat production 3.4 million tons to 83.4 million tons because of good conditions currently. Germany’s DRV estimated their wheat crop at 24.44 million tons, over 20% higher than last year’s drought hindered crop.
Spring wheat planting progress was reported as 2% complete, up 1% from last week but below the 5 year average of 13%. The increase came primarily from Washington and Idaho. No surprise that with the wet weather conditions that exist in the upper Midwest, that Minnesota and the Dakota’s have not reported any planting progress. Winter wheat crop conditions remain steady at 60% good/excellent. Last year at this time the rating was only 31% good/excellent.
The Argentine government made their first estimate of the season on their soybean crop at 55.9 million tons, which would be over 18 million tons above last year’s drought damaged crop. USDA currently is estimating 55 million tons. The Philippines are projected to import a record 3.15 million tons of soymeal this year, due to increased feed demand for hogs and poultry, according to the USDA. As of last week’s export report, 1.35 million tons is currently committed to the U.S. The NOPA crush report indicated that 170.011 million bushels of soybeans were crushed in March, the 2nd largest amount on record for that month. Amounts were thought to be somewhat restrained by flooding issues
China was revealed to be a buyer of more US pork in this week’s export sales data. This week they bought just over 23,000 tons which is a solid number. This comes on the heel’s of last week’s enormous purchases. The fact that China is reaching for US supplies even though there is still a large tariff in place, indicated just how bad their African Swine Fever problem really is. The cattle on feed report was bearish. The placement number of 105% was above estimates of 103% and should weigh on futures prices next week.
Prices are trading near 2019 highs as positive economic data from China supported to prices. The weekly EIA inventory report was neutral as front month futures remain rangebound between $60.00 and $65.00 per barrel. AAA reports a national average retail gasoline price of $2.836, up from $2.784 last week and compared to $2.738 at this time last year. Gasoline stocks have declined for nine consecutive weeks bringing inventories below their seasonal average for the first time since 2017. As a result of these bullish fundamentals RBOB futures, last trading at roughly $2.06, have rallied 55% ytd.