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It has been slow, but grain producers are beginning to make a little progress planting corn. As of last week, 17 percent of the crop was planted compared to 32 percent a year ago and 27 percent for the average. Minnesota and Ohio have yet to plant their first seed. The lateness of getting the crop in the ground will keep weather on the front burner as much of the crop will be pollinating during the heat of summer. Exports continue to rock and roll with inspections last week at 57.6 MB. Currently, they are on track to beat USDA’s projection of 2.225 BB. Looking at the funds, they are long 760 MB and have room to add to their position. Since 2010, their longs have exceeded 1.0 BB on two occasions with the record being 1.130 BB.
While producers have catching up to do in planting corn, they are on par with the average in soybeans at 5 percent complete. Prices rebounded early this week on news of a trade delegation heading to China. The bulls are hoping for an announcement of a soybean sale. As mentioned in previous comments, China’s primary source is South America until late summer. While they need U.S. soybeans to feed their livestock industry, an announcement may not come from the meeting this week. Exports saw some improvement last week with inspections at 24.9 MB. However, the pace of shipments is trailing to reach USDA’s projection of 2.065 BB. Looking at the funds, they are long 690 MB and have room to add to their position. Since 2010, they have exceeded 1.0 BB two times during the month of May with the record being 1.125 BB. This season, it will be difficult to justify a position of this magnitude unless weather becomes a serious threat.
The rating for winter wheat improved 2 points last week to 33 percent of the crop in good-to-excellent condition. However, when you look at the big picture, it is in poor shape and behind in development at 19 percent of the crop headed versus the average of 30 percent. Spring wheat planting is underway but is lagging at 10 percent done compared to the average of 36 percent. These factors gave the market a boost this week but record global stocks and sluggish exports continue to overhang. Inspections last week were mediocre at 13.8 MB. Looking at the funds, they increased their shorts 40 MB to 355 MB. However, the strength this week is forcing them to cover.
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