Agriculture Markets: USDA Crop Progress Report Shows Slow Planting
- Grain markets finished Tuesday mixed with wheat down over 1% and corn up.
- Trade uncertainties, large supplies, and a lack of demand continues to lead grains lower.
- Stormy and wet weather pattern over the grain belts to persist through the next two weeks providing some support especially for corn.
Expect for prices to continue sliding down overall with trade uncertainties, large inventory, and a lack of domestic and/or global demand. Weather will continue to support especially corn.
USDA Crop Progress Report shows planting this year lagging well behind the 5-year avg.; delays are likely to continue with an active storm pattern across the corn and soybean belts
The U.S. July corn futures finished Tuesday's trading session higher 0.59% to $3.6312 after a midday rally. Meanwhile, U.S. July soybean futures were seen down 0.74% to $8.5462, while U.S. wheat led all grains down 1.18% to $4.2888. For the less volatile, unleveraged Teucrium ETF grain products, the Teucrium Corn ETF (CORN) was seen up 0.32% ($0.05) to $15.06, the Teucrium Soybean Fund (SOYB) led the way lower 0.79% ($0.12) to $15.10, and the Teucrium Wheat Fund (WEAT) was also down 1.00% ($0.05) to $4.94. Figure 1 below is a price trend chart of the front-month July futures contract for corn over the past 24 hours.
Figure 2 below is a price trend chart of the front-month July futures contract for wheat over the past 24 hours.
July Chicago Soft Red Winter Wheat (SRW) futures were seen down 6.2 cents to $4.290, with July Kansas City Hard Red Winter Wheat (HRW) futures down 2.2 cents to $3.946, resulting in a bearish 34-cent premium of CBOT wheat to KCBT wheat. MGEX's Hard Red Spring Wheat (HRSW) May contract was down $0.72 to $4.906. Figure 3 below is a price trend chart of the front-month May futures contract for spring wheat.
Monday afternoon, the USDA issued its weekly crop progress report. The report showed that as of April 28, 15% of this year's corn has been planted. That's matches last year's pace of 15%, is ahead of last week's 6%, but lags well behind the 5-year average of 27%. It's the southern states that continue leading the way so far, including Texas (65%), North Carolina (53%), Missouri (45%), and Tennessee (41%). Missouri and Tennessee made the largest week/week percentage jumps of +29 and +25, respectively.
Spring wheat planting indicated 13% of acres across the top six production states having reported. This is ahead of last year's 9%, last week's 5%, but well behind the 5-year average of 33%. States leading the way so far are across the Pacific Northwest, including Idaho (61%) and Washington (52%), both reporting more than half of its crops planted. Meanwhile, Minnesota (2%), North Dakota (5%), and South Dakota (8%) are well behind its average of 33%, 21%, and 60%, respectively.
Soybean planting is just starting with only 3% planted. That's behind last year's 5% and the 5-year average of 6%. States leading the way in early soybean planting include Louisiana (24%) and Mississippi (20%).
Meanwhile, the winter wheat crop continues to impress with 64% reporting in good to excellent condition vs. 62% last week and 33% last year.
Other crops of note from Monday's report include:
- Oats – 43% planted (up from 7% the prior week)
- Rice – 38% planted (up from 7% the prior week)
- Sorghum – 20% planted (up from 3% the prior week)
- Sugarbeets – 25% planted (up from 11% the prior week)
- Cotton – 11% planted (up from 2% the prior week)
Here is the link to this week's USDA Crop Progress Report.
Weather continues to support the grains market especially corn. With a blocking pattern in place with cooler air to the north and warmer air to the south is allowing for the central U.S. to get slammed by an active weather pattern. This wet and stormy pattern across the central U.S. is likely to continue through mid May. Figure 4 is a map showing the seven-day accumulated precipitation forecast across the Lower 48.
Figure 5 is a map from the 12z GFS ensemble depicting wetter-than-normal (in green) precipitation over much of the corn, wheat, and soybean production centers over the next seven days.
On the trade front, uncertainties continue to weigh on the market, especially soybeans. On Tuesday, White House Economic Adviser Kudlow said that he is cautiously optimistic about a U.S.-China deal and that we will know more in about two weeks or so. On April 4, President Donald Trump said we would likely know if a deal could happen within 4 weeks (which would be Thursday of this week).
Large old crop supplies of wheat and corn both domestically and internationally also continue to weigh on those crops. A lack of demand globally is enhancing the downside.
Stay Tuned For More Updates!
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