Last Monday’s planting progress was close to expectations. Corn planting progress came in at 27% complete, up 20% from last week, 15% ahead of last year and 7% over the 5-year average. Soybean planting progress is at 8% complete, up 6% on the week, 6% over last year and 4% over the 5-year average. Iowa, Minnesota and Illinois all saw more than 20% gains in corn planting progress.
President Trump said he would use the Defense Production Act to order meat-processing plants to remain open during the Covid-19 outbreak. This is to help with the continued interruptions to the food supply, due to the possibility of close to 80% of production capacity being shut down in the U.S. Some analysts’ say the pork industry is already down 30% capacity and the beef industry is down 40%. The order will provide guidelines for minimizing risk to workers and additional protective gear to help address liability concerns.
Ethanol production for the week ending April 24th, decreased 24,000 barrels per day to 537,000 barrels per day, another record low. This is down almost 48% from a year ago. Corn used for ethanol was reported 50% lower than what was used only 8 weeks ago, at 54.4 million bushels. Industry experts indicate another large 300-plus million bushel reduction in corn demand for ethanol would not be surprising. For the first time in 5 weeks, ethanol stocks dropped almost 1.4 million barrels to 26.3 million barrels. Gasoline demand increased for the second week in a row, suggesting the beginning of a long recovery.
Grain markets traded higher Thursday with support being found after strong numbers were reported on the Export Sales Report for the week ending April 23rd. Corn exports were reported at 53.4 million bushels for the week, well above the 15.5 million bushel weekly average needed to meet the USDA’s export projection for the year. Mexico was the largest importer; purchasing 21.4 million bushels of old crop corn. Soybean exports were reported at 39.6 million bushels, which was well above market expectations. China was the lead purchaser of soybeans, buying 22.7 million bushels. It was also reported late in the trade session that China purchased 300,000 tons of soybeans to be delivered in August and September.
At the end of March the USDA released their Prospective Plantings report. Their estimate was to see just shy of 97 million U.S. acres seeded to corn. At the time of the release, many in trade doubted the figure claiming market economics would sway acres from corn to soybean production. While still possible, the exceptional planting conditions across much of the Corn Belt is thought by many to prevail over economics. Some experts are now claiming corn acres could be as high as 98 million. A recent study by FC Stone corresponds with those experts. That data shows that the when the corn planting pace is above 30% in the 1st week of May, there is a 70% chance corn acreage increases from the March to June reports. Expectations are to see corn planting exceed 50% in next week’s report. As with any year, acreage debates will take place well beyond the June Planting report.
For more information, you may contact Kristi Guse at (712)-260-6486, or e-mail at email@example.com. The opinions and views expressed in this commentary are solely those of Kristi Guse. 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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