Morning Comments; Wednesday, May 27th, 2020
Agrivisor - SETZ - Wed May 27, 6:40AM CDT

Corn planting in the United States is now in its later stages and soybeans will be wrapping up soon as well. As of Sunday night, a reported 88% of the US corn crop was seeded, just ahead of the average 82% for this date. Soybean planting was reported at 65% complete with the average being 55%. Trade was more interested in the initial corn crop rating at 70% Good/Excellent. The question now is how far planting advances this week given the wet forecast and recent rainfall in troubled sports of the US. Planting across the United States is at a stage where other than a few select areas, attention will shift to crop condition. Crop scouts in the heart of the Corn Belt claim the crops look quite good, which is not surprising given the fact this region has received beneficial weather since the planting season began. It is also not surprising that the fringe areas are reporting poorer conditions as they have struggled all year. In fact, some farmers in these regions report having more corn to harvest from last year than they have planted this year. This comes as more areas are at their final plant dates for insurance. Given current market values, not many farmers in these areas will push to get a crop seeded at this point. It is also questionable as to how many will attempt replants this year if needed. Bottom line is that corn acres are declining from the June planting intentions. The question now is how many will be lost. Aside from current conditions, trade will now start looking more towards long-range weather outlooks to see how the crops may finish. The market has been void of risk premium all season and we may finally start to see this added into futures.

Highlights

* President Trump claims he will take action against China this week

* Trump not pleased with China on Hong Kong developments

* Concern is any action will void Phase 1 agreement

* US dollar collapses as investors return to equities

* Covid-19 cases surge in Brazil

* Covid is impacting Brazil meat packers

* Large deliveries may limit Chinese buying

* Drought continues to impact EU

* US DDG values up 11% from year ago

* Market focus shifting to crop condition

* “At home” milk deliveries surge in popularity

Corn

* Corn 88% planted; average is 82%

* Initial crop rating 70% G/E

* Overall demand is questioned

* Ethanol demand remains slow

* Analysts make further reductions to Brazil crop

Soybeans

* Soybeans 65% planted

* Soybeans 35% emerged, 27% is average

* Uncertain Chinese demand

* Reports of poor US stands

* Funds add to long position

Wheat

* Spring wheat 81% planted, 90% average

* Winter wheat 54% Good/Excellent

* Winter wheat 68% headed

* Wheat tour results show smaller crop than USDA

* Ukraine predicts 15 mmt increase to output in 5 years

Livestock

* Chinese pork imports in April a record

* China imported 400,000 tons of pork in April

* 2020 Chinese pork imports total 1.35 million pounds

* Chinese beef imports in April +28% from 2019

* China to auction 30,000 mt pork today

This commentary is the sole opinion of Karl Setzer, Senior Commodity Risk Analyst for AgriVisor, LLC. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to send an e-mail to ksetzer@agrivisor.com.




 

Market Commentary provided by:

Karl Setzer Grain Commentary