Corn planting progress increased 5% for last week to 93% complete; this was almost 30% higher than a year ago and 4% over the 5-year average of 89%. Soybean planting improved 10% over last week at 75% complete. This is almost 40% more than the same week a year ago and 7% ahead of the 5-year average of 68%. Crop condition ratings for corn improved 4% to 74% good/excellent. The first soybean condition rating for the year was 70% good/excellent. It has long been said crop ratings are not highly correlated to yield but in general ratings of 70% good/excellent or more, would indicate better than trend line yields.
Planting progress and crop conditions were both what the trade anticipated and the forecast for the next two weeks is favorable for crop development. Cooler spring temperatures have us short on growing degree units, but the warmer than normal temperature forecast should help spur crop development and catch up quickly.
Weather in the Plains states has been gathering more headlines in the past week. Soil moisture levels have dramatically decreased, but crop stress is thought to be minimal at this time. Earlier forecasts showed that the Tropical Storm forming south of Mexico would likely bring some relief to dry areas. However, updated weather models are now showing the storms’ path is expected to shift eastward, suggesting the driest areas affected in the west may miss the earlier predicted rainfall.
Ethanol production for the week ending May 29th rose 41,000 barrels per day to 765,000 barrels a day. Ethanol stocks decreased to 22.5 million barrels, which is nearly equal to last year at this time. Corn usage for ethanol for the marketing year is estimated to be 8% or 325 million bushels below the previous years’ pace. Gasoline demand increased a little over 4% for the week, with average demand for the past 4 weeks is down around 29% from a year ago.
Reports are Russia and Saudi Arabia reached an agreement to extend the current OPEC+ production cuts through July with conditions. Both countries would like to see other members increase cutbacks to production to help offset previous over-production. OPEC is expected to discuss this proposal.
Some private analysts are starting to release their projections for corn and soybean yield estimates. Barchart is currently projecting a 48.8 bushel per acre yield on soybeans, which is a bushel per acre lower than the USDA’s May estimate. The firm estimates corn yield at 172.4 bushels per acre, which is lower from the USDA’s May estimate of 178.5 bushels per acre. These estimates are lower, however not all analysts believe this will be the case. Some analysts think we could see the potential for higher yields due to earlier planting and recent weather conditions.
Soybean markets found support during the week from the USDA continuing to report export sales despite the report earlier this week that the Chinese government was going to halt U.S. soybean purchases. South American soybeans are getting more expensive on the world market pushing demand toward the U.S. Reports on Thursday were a Brazilian cargo was switched to load at the U.S. Gulf due to the shift in prices. The Brazilian Real has been strengthening versus the Dollar since mid-May, which has been the main cause for the inflating prices in South America. While corn markets showed, positivity from optimism that ethanol demand could slowly be coming back.
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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