Weekly market review
Planting progress for the week ending May 5th was as expected for both corn and soybeans. Corn planting progress estimated at 23 percent complete, up 8 percent from the previous week, and 23 percent behind the 5-year average of 46 percent.
Soybean planting progress estimated at 6 percent complete, a 3 percent gain from the previous week. As with corn, soybean planting is lagging the 5-year average, but only by 8 percent.
Corn emergence is lagging about 8 percent, as one would expect with the weather slowing planting progress. Cotton and sorghum planting is near normal, but rice and sugar beets are lagging similarly to corn.
Looking deeper into the corn planting progress by state there are some significant deviations from the 5-year average.
The following states are behind the 5-year average; Illinois is 56 percent, Minnesota is 36 percent, Missouri is 25 percent, Ohio is 25 percent, and North Dakota is 20 percent. South Dakota is 29 percent behind the 5-year average with zero reported planted.
There are not as large of deviations from the 5-year average on soybeans except for a few southern states. Planting progress showed that the U.S. corn crop is exactly half of the five year pace for this time of year, the slowest pace since 2013. Since 1986, only the years of 1995 and 1993 came in slower. Each of those years, corn yield came in several bushels below trend yield. This is leading to concerns this year’s result could be the same.
Corn planting has been delayed as well as spring wheat seeding. This week’s report pegged wheat seeding at 22 percent complete, which is slightly behind last year’s 27 percent completed for this date but well behind the five-year average of 49%. Wheat has seen less of a reaction to this data as planting dates and yield reductions show much less correlation in wheat than corn.
Markets struggled this week after the White House threatened that the U.S. would increase tariff levels from 10 percent to 25 percent of $325 billion in goods from China if an agreement were not reached by Friday, May 10th. This came two days before China’s top negotiators were slated to arrive in Washington to continue talks and many believed possibly complete a deal. Looking back, history shows that past negotiations with China have followed a similar pattern to what is currently unfolding between the two countries. Concerns that a deal may not be reached are still elevated but the fact that discussions took take place in Washington later this week had many optimistic.
Details of the issues that derailed progress between the U.S. and China are now becoming available.
It was said that China edited a 150-page trade document, backtracking on issues that had already been agreed-upon. The altered areas were some of the most significant items, which were also the main disputes in early negotiations. Most notably, theft of intellectual property and trade, forced technology transfer, and currency manipulation. Chinese officials stated that talks are ongoing and that changes were part of the negotiation process.
For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at email@example.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.
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