Plenty of Rain in Forecast but too Early to Get Excited About Planting Delays.

Corn: Prices moved to one-month highs during the shortened holiday trading week but values dropped into Monday as heavy supplies weigh on the market. Expectations for delayed plantings due to rain in the western Corn Belt was quickly brushed off as weather forecasts improve long-term and modern farm equipment can get a majority of the job done over the next few weeks. USDA reported that as of Sunday, 6% of the US corn crop was planted, doubling the prior week’s pace, but behind the five-year average of 9%. There is still plenty of rain in the forecast but it simply remains too early to get excited about planting delays. 

Bulls seem to be grasping at straws as they are attempting to bring attention to the possibility of disease and inadequate nutrients due to the excess soil moisture. It would seem more likely that the heavy short position (~150,000) in place by the funds will ultimately lead to rallies if weather headlines become more concerning, however, the massive crop anticipated from South America should cap any gains. 

Chinese farmers will plant less corn this season, resulting in the smallest crop in six years, as the world’s top grains producer seeks to whittle down its huge glut of the grain and boost production of soybeans, according to a Reuters poll.During the spring planting season that starts in April, growers will cut their corn acreage for a second straight year to 35.2 million hectares, according to the median of estimates from four responses to the poll. That is 4.1 percent lower than the 36.7 million hectares that China’s National Bureau of Statistics (NBS) reported planted during the last crop year.

Soybeans: Soybeans continue to see a choppy trade but have ultimately recorded losses already into this week remaining slightly higher than the recent lows set last week. There continues to be a lack of supportive fundamental news for prices with another month to go before planting pace will be more closely monitored. A selloff in China’s soybean market overnight (see chart above) sparked early weakness in Chicago. 

Improving relations between the Trump Administration and China is encouraging for exports as well as the March figures recently reported. China imported 6.33 million MT of the beans in March, a record for the month. Though the loss in corn acres from China is expected to be met with increased bean acres; there is to be an 8.1% jump in land dedicated to soybean crops this year, according to a survey of 110,000 Chinese farmers by the National Bureau of Statistics.

Ukraine will also increase the planted areas under soybeans by 100-200 thsd ha to more than 2 mln ha, which will also enlarge the oilseed harvest volumes by 10-12%, declared the Deputy Minister of Agrarian Policy and Food of Ukraine, Olena Kovalova on April 13. According to her, in 2016 Ukraine exported nearly 2.7 mln tonnes of soybeans at the sum of over 985 mln USD.

Soybean crushings fell below expectations during March as plants in Iowa sharply cut back their processing pace from a year ago, the National Oilseed Processors Association said on Monday. NOPA said that its members crushed 153.060 million bushels during March, up from 142.792 million bushels in February. A year ago, the March crush totaled 156.690 million bushels.

On the radar from Michael Cordonnier: Farmers in Mato Grosso produced a record large soybean crop in 2016/17, but another sign that they have been reluctant to sell their soybeans is the reduced number of trucks hauling soybeans in highway BR-163. Highway BR-163 is the main artery for moving soybeans out of Mato Grosso to export facilities in southern Brazil and also along the Amazon River. The number of trucks traveling the highway this year is significantly lower than last year. Click Here