This is a sample entry from John Payne’s newsletter, This Week in Grain, published on Monday, May 04, 2015.
Crop progress was just released as it will be every week at 3 pm central, Monday afternoon. The focus on the reports now and into the next few weeks will be corn plantings / emergence pace, bean planting pace and the condition of the wheat crop. All of the above appear to be “bearish” so far. I used quotations there to indicate that I believe we should expect some sell the rumor buy the fact type of strategy to keep in mind with all of this stuff.
The trade was expecting corn plantings above 50% and bean plantings to come in above 10%. Both of these crops came in ahead of those numbers with corn 55% planted vs 38% average and beans with 13% planted vs 9% average. Congrats to Iowa for planting a whopping 54% of its corn in the last week. The winner of this year’s Ricky Bobby (if you ain’t first, you’re last) winners for planting is Minnesota. They are 83% planted as of last weekend. I don’t have records of this but I assume this is probably one of the first times Minnesota has led plantings into the month of MAY. What does this tell me? Its dry up there, really dry. Right now the market likes and appreciates (meaning sells) dry weather, but it wont be like that forever. NW Iowa and SW Minnesota need moisture like the Bears needed to trade for a QB this weekend. The market will maintain its focus on model runs over the short term to project bean planting progress. Remember our “rule of thumb”, if corn is 80% planted by May 15 and beans are 80% planted by June 15- we can expect the USDA to keep or raise yield expectations into the July report. So far, so good.
Wheat conditions were raised just slightly with 1% moved from fair to the excellent category. Its weird but the heavy production states out west like Kansas and Oklahoma who have received moisture over recent weeks have not seen much of a jump. It will be interesting to see a sideways condition rating in wheat pulls any shorts out of the market.
Egypt snap tender’s wheat on Monday afternoon. They are looking for cargos of US soft red wheat and Pacific soft white wheat. It will be interesting where the offers come in as values have fallen precipitously in recent weeks (see below).
Here is a chart of the French Matif wheat priced per ton in dollars vs the US soft wheat contract in tons. Keep in mind there are delivery costs that are not included and we are still about 14 dollars per ton on the board more expensive. This is the tightest spread seen in a long while, but the US is still pricier none the less.
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