US Planting Behind Pace, But Warm Weather Takes Hold
USDA pegs US corn planting at 5% complete vs normal of 13% for this time of year. While it was below the 7% expected by the trade, there is still a lot of ground the US farmer can make up before mid-May when slow planting could be a problem.
Highs on Monday reached into the low 70s as far north as SD/MN with some planting noted by FBN farmers in NE & IA. Temps in the 6 to 10 day forecast are pushing 10 degrees warmer than normal with a dry trend expected for waterlogged fields in the ECB. Soybean planting is at 2% complete.
Brazil Weather Maintains Dry Bias
The EU & GFS models maintain complete dryness across Central Brazil into the first week of May, with accumulation since April 1st rivaling that of 2016, when safrinha corn production was slashed by drought. Longer term moisture deficits aren’t quite as wide as they were during the 15/16 crop year, but no doubt much more rainfall is needed in the next 3-4 weeks to validate USDA/CONAB production forecasts. Assuming the models verify April 1-May 7 precip will reach just 2.2” vs. 4.5” on average. Hotter weather is on the way, with temperatures expected to range from 4-8°F above normal over the next two weeks across the southern 30-40% of the safrinha corn belt. The hottest weather is expected in the 6-15 day period, when temperatures should top 90°F.
Corn Shipments Sizzle
Weekly export inspections included 68 Mil Bu of corn, up 6 Mil on the week; 17 Mil Bu of beans, up 1 Mil; and 23 Mil Bu of wheat, up 4 Mil. For their respective crop years to date, the US has shipped 1,172 Mil Bu of corn, 20% below last year; 1,573 Mil Bu of beans, down 13%; and 790 Mil Bu of wheat, down 10%. This week’s boost in wheat shipments makes the USDA’s forecast look a bit more valid, while Gulf corn basis continues to rally as the need for physical supply ramps up.
Interior Basis Bids Firm
Monday saw broad-based increases in corn basis with 1 to 3 cents fairly common at key buyers. Soy basis was also firmer but with slightly less upside than corn. Farmers likely to throttle back selling as they turn to planting and with limited appetite for selling more grain at diminished price levels. Basis levels should continue to firm with end-user margins for ethanol and soy crush running strong and export volumes needed to satisfy commitments.
US dollar Hits 4-Month High
The US Dollar Index eclipsed its highest mark since December, and rallying 5% since its recent lows back in early February. The weakness in the US Dollar for much of 2018 helped fuel corn exports as the soft greenback gave the US a competitive advantage in global markets.
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