Tuesday May 12, 2020

  • Some more soybean sales this morning to China helping keeping bean futures on the green side of unchanged – overall markets fairly quiet heading into the USDA report at noon today
  • Currently American soybeans are the cheapest into China given the depresses prices so it should not come as a surprise to see China back at the table
  • China’s government is expecting an increase in imports in 2020/2021, corn expected up 25% from previous marketing year, with beans up 3% 
  • U.S. planting progress
    • Corn reached 67% planted, ahead of 5 year average pace of 56%
    • Soybeans up to 38% planted, 5 year average pace 23% complete
    • Spring wheat planting still behind average at 43% complete vs 63% 
    • Winter wheat conditions fell this to 53% good/excellent this week, right around the average of 52% g/e

This report will be the first time the USDA states their predictions for the coming 2020/2021 crop year. They will be using the acreage numbers first given in the March 31 report. 
Corn, is expected to come in with a very large carryout number for 2020/21 using the 97 million acres initially estimated, trend line yields and potentially decreased demand numbers. As for old crop carryout, an increase is also expected due to a decreasee in demand over the past several months now. The slightly encouraging spin on the corn market is that things do seem to be recovering. Ethanol plants are starting to re open slowly, the livestock industry is stabilizing and people are going back to work slowly in the U.S. so hopefully, we have reached and past the worst demand levels we are going to see.
Soybeans, are looking slightly more optimistic. Same story will be true, they will use the March acres numbers which were overall lower than the industry expected. Bean demand overall hasnt been as affected as corn so minor changes expected. Overall expecting a slightly higher old crop carryout and new crop carry outs close to what was seen in 2017 and 2018.
Wheat, minor changes on wheat as it seems to be the commodity least affected by the coronavirus pandemic. Will get more clarity on winter wheat acres that made it through the winter.