USDA Crop Report and Improved Planting Outlook - Wednesday, 25 April 2018

Update for April 25th, 2018

The USDA weekly crop report shows that very little planting advancement took place over the past week.  Producers are falling further behind each day and stress levels are surely increasing.  The chart below shows where progress stands as of Monday compared to a week ago as well as the 5 year average.

Temperatures have rebounded this week across the Midwest with forecasted highs hitting the 60-70 degree range.  The central and northern portions of the Plains are expecting slightly colder temps with parts of South Dakota and Nebraska only looking for high temps in the low 40’s.  The map below shows the 4 inch soil temperature readings from Tuesday morning across the country.


Much of todays market movement is a result of technicals and Fund buying.  There is little else at this time to push the market higher even with the weather and the lack of little planting progress in the U.S. With the current weather outlooks showing what appears to be an opportunity for producers to get some planting done in the coming weeks there is no need for the market to offer a risk premium at this point.

Interior movement of corn and soybeans is falling behind last years pace.  A year ago we saw a lot of bushels move from the higher yielding Western Corn Belt into the lower yielding East.  Higher yields in the East have prevented the need for this to occur this year and concerns are growing at some terminals in the West that they will not be empty before harvest begins this fall.   Aside from this another contributing factor to the lack of grain movement are the high water levels.  Currently flooding is being reported along the Mississippi, Illinois and Ohio Rivers which is impacting barge movement to ports at the U.S. Gulf.


The soy complex is dealing with the ongoing trade situation with China.  There are concerns that China may not only discontinue purchasing soybeans from the U.S. but may also cancel purchases previously made. Chinese customs officials have reported the soybean import data for the month of March which shows that China imported 5.66 million metric tons of soybeans which is a 10.5% decrease from the same period in 2017. Imports from the U.S. fell by 27% during March while sales out of Brazil increased by 33% from March of 2017. One important point to note though is that while Brazil is seeing an increase in Chinese buying many of the buyers that usually book from Brazil shifted their orders to the U.S. which should off-set some of the cancelled orders. Over this past weekend China bypassed both the U.S. and Brazil and instead purchased soybeans from Paraguay. 


Dr. Cordonnier has left his estimates for South American yields unchanged and reported this week that, “Soybean prices in Brazil have strenthened in recent weeks due to a number of factors including a drought in Argentina that severely reduced soybean production, an impending trade dispute between China and the U.S, with the potential for a 25% tariff on U.S. soybeans going to China, and a weaker Brazillian currency due primarily to political instability in Brazil. Up until this point, Brazillian farmers have been relatively slow sellers of their soybeans in the hope of better prices.  They now have stronger prices and farmers have started to sell more of their 2017-18 production. Even with the increased sales pace, the competition between exporters and crushers for available soybean supplies has resulted in premiums at some Brazillian ports of up to $1.90 above the Chicago Board of Trade.”


The Australian Bureau of Meteorology reports that their latest readings suggest that we are in a neutral weather phase and they expect that it will remain in effect throughout our growing season.  When a neutral pattern exists we typically find much higher yield variability across the U.S. which is unlike El Niño which tends to bring above-trend yields and La Niña which historically delivers below trend yields.


The jet stream is expected to bring in above normal temperatures over the weekend to the Midwest and Plains.  Precipitation is expected to be focused in the eastern half of the southern Plains region.



The most recent 6-10 day temperature outlooks are showing a continuation of warmer temps  across the Midwest and Plains as we end the month of April next week. The Midwest is expected to see slightly above normal rainfall while a dry pattern sets up once again for the hardest hit drought regions.





Forecasters from The Weather Channel have released their 3 month outlook for May through July. Meteorologists at The Weather Company are predicting that near normal to below normal temps will continue in the Midwest through July. The cold and snowy pattern that we have seen this month has led them to expect that the trend is likely to continue into the summer.  As you notice in the maps below we see that the West is expected to see above average temps while much of the rest of the country should see temps running near normal with some small variances to either side. This pattern is very similar to what the U.S. experienced last summer when the West saw record heat and the East enjoyed more typical temps.


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