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Afternoon Market Recap for May 20, 2019

What will today’s crop progress report reveal?

Grain prices continue to firm on slow planting progress

Rainy spring weather continues to hand out planting delays, triggering another round of short-covering and pushing grain prices substantially higher in Monday’s session. Wheat found the biggest gains, with most contracts up 3.5% today, while corn and soybeans each trended more than 1% higher.

The Central Plains and western Corn Belt are bracing for a very wet week ahead, with those areas set for another 3” to 4” or more additional rainfall through May 27, according to the latest seven-day cumulative precipitation map from NOAA. Daytime highs are also expected to be cooler-than-normal for the rest of this week across the central U.S. Severe weather, including tornadoes, are expected in the Southern Plains later today.

Stumbling tech stocks left Wall St. on its heels to start the week, with the Dow down 84 points in afternoon trading to 25,679. Energy futures were mixed, with crude oil trying to break back over $63 per barrel while gasoline and diesel both down more than 1% this afternoon. The U.S. Dollar softened slightly.

Corn prices moved more than 1% higher today on short-covering triggered by worries over planting delays. July futures gained 5.75 cents to $3.89, with September futures up another 6.25 cents to $3.9675.

Corn basis bids were mixed Monday, trending 2 to 3 cents lower across several interior processors and ethanol plants but firming 2 to 9 cents at two Midwestern elevators today.

Traders continue to hold a large net short position for corn after slightly increasing that number to 282,918 contracts for the week ending May 14.

Will this spring’s slow planting pace change that trend moving forward? Analysts expect USDA to report 2019 corn planting progress reaching 50% as of May 19, which is far behind the five-year average of 80%. Trade estimates ranged between 42% and 61%. USDA’s next crop progress report comes out at 3 p.m. this afternoon.

Corn export inspections also eased week-over-week, falling to 32.3 million bushels for the week ending May 16. That stayed in the range of trade estimates of 23 million and 39 million bushels, however. Japan was the No. 1 destination, with 9.8 million bushels.

The European Union’s MARS crop-monitoring service raised its per-acre estimates for 2019 corn production to 117.8 bushels per acre. EU corn imports this marketing year, meantime, are 37% higher year-over-year after reaching 846 million bushels as of May 19.

Russian consultancy SovEcon expects the country’s May corn exports to reach the lowest monthly total since last October, shrinking to just 7.9 million bushels.

Farm Futures wants to know what field conditions you’ve seen as the spring unfolds. Click this link to tell us what’s happening in your area, and we’ll publish regular updates featuring firsthand accounts from growers with an interactive map of conditions. Farmer reports this spring have been an accurate predictor of what USDA reports in its weekly crop progress updates.

Preliminary volume estimates were for 526,531 contracts, down moderately from Friday’s final count of 642,845.

Soybean prices grabbed double-digit gains Monday after a round of short-covering pushed prices more than 1% higher. July futures added 10 cents to $8.3175, with August futures up 10.25 cents to $8.3850.

Soybean basis bids were steady to firm Monday, rising 3 to 9 cents higher across multiple Midwestern locations today.

Traders are currently holding a record net short position for soybeans after increasing that number to 168,835 contracts for the week ending May 14.

Analysts expect USDA to report 22% of the 2019 U.S. soybean crop was planted as of May 19 in its next crop progress report, out later this afternoon. That’s versus the prior five-year average of 47%.

Soybeans saw total export inspections reach 18.3 million bushels last week, which slid slightly below the prior week’s tally of 18.9 million bushels while staying in the middle of analyst expectations that ranged between 14 million and 25 million bushels. China led all destinations with 7.6 million bushels.

European Union soybean imports are trending 9% higher year-over-year after reaching 481 million bushels as of May 19. EU soymeal imports are down 6% and EU palm oil imports are down 1% over the same period.

Preliminary volume estimates were for 127,605 contracts, falling 31% below Friday’s final count of 184,857.

Wheat prices surged higher today amid a major round of short-covering over worries that wet spring weather is damaging yield potential for the winter wheat crop and creating significant delays for spring wheat planting. July Chicago SRW futures gained 13.5 cents to $4.7825, July Kansas City HRW futures added 15.5 cents to $4.2575, and July MGEX spring wheat futures rose 15.75 cents to $5.4650.

Ahead of this afternoon’s USDA crop progress report, analysts expect the agency to slightly lower its assessment of the 2018/19 U.S. winter wheat crop, with 63% rated good-to-excellent as of May 19 (down from 64% the prior week). And analysts estimate spring wheat planting progress at 63% complete.

Wheat export inspections reached 27.8 million bushels last week, which was down from the prior week’s tally of 32.3 million bushels but ahead of the average trade guess, which ranged between 14 million and 22 million bushels. Indonesia led all destinations with 4.8 million bushels.

The European Union’s MARS crop-monitoring service slightly upped its per-acre yield estimates for 2019 wheat production to 89.96 bushels per acre. EU soft wheat exports this marketing year, meantime, are down 1% from last year after reaching 676 million bushels as of May 19.

Russian consultancy SovEcon expects the country’s May wheat exports to fall to less than half of its normal monthly average, landing at around 33.1 million bushels.

Egypt, one of the world’s top wheat importers, has purchased 80.8 million bushels of domestic wheat so far this year and expects to purchase more than 132 million bushels locally this summer.

Preliminary volume estimates were for 115,299 CBOT contracts, down slightly from Friday’s final count of 121,717.


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