USDA’s Weekly Crop Progress Scores: HRW Crop Looks Strong, SRW Mixed
The USDA’s NASS weekly crop progress condition scores for wheat showed an HRW crop that continues to exhibit improvement while the SRW scores illustrated some vulnerability.
HRW scores in key producing states: TX, KS, CO and NE all showed improvement at the lower end of the ratings scale where the percentage of the crop rated “very poor” and “poor” was reduced. Conversely, scores rated “excellent” and “very good” showed some signs of weakness.
The Texas wheat crop remains the weak leg but continues to improve with each passing week as the percentage rated “very poor” and “poor” continues to decline.
SRW scores were geographically mixed. Scores in the delta, LA, MS and AR continue to improve after the deluge of rains in early/mid March. Condition scores in AR are showing weekly improvement as the percentage rated “very poor” and “poor” dropped to 17% down from 33% the previous week. Scores the northern producing states: OH, IL and IN were mixed.
What It Means for the U.S. Farmer: The weekly HRW scores continue to show weekly improvement as the crop continues to benefit from progressive moisture. Headed into the first week of April, the HRW scores are close to the top of the 10-year range and seems to indicate a big crop. SRW scores are a mixed bag. We continue to monitor the crop in the northern states as the wheat breaks dormancy.
Brazil’s Q1 Corn and Soy Exports Rise Above 2018 levels
Brazil shipped 8.9 MMT of soybeans in March, more than the 8.81 MMT in March 2018. Total Q1 soy exports were 17.2 MMT versus 13.2 MMT in 2018.
The large quarterly volume comes despite analysts' projections for a smaller annual volume this year. Future shipments could fail to reach 2018 levels as the crop is smaller, 114.75 MMT versus 120 MMT in 2018, and China has resumed sporadically buying U.S. soy.
Q1 2019 corn exports were also larger in the first quarter of 2018. Brazil shipped 891,900 MT in March and 6.86 MMT during the quarter. This figure compares to 4.88 MMT during Q1 2018.
Brazilian export data seems to illustrate that some of the corn export business could be attributed to the need to free storage space ahead of second corn crop, safrinha, harvest that starts in late May-June.
A strong U.S dollar compared to the Brazil real which has been trading close to the top of the 5 year range during the first quarter helped create headwinds for U.S. export program.
What It Means for the U.S. Farmer: The pace of the Brazilian corn and soy export programs during March was no doubt aided by an early soy harvest and a weak exchange rate, USD/BRL. The corn export pace was a bearish input to the U.S. corn program. While the Brazilian real has strengthened in recent weeks the decline in the U.S. corn futures prices now show FOB spreads favoring the U.S. corn.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
