Corn futures traded sharply lower today and were led to the downside by weakness in the July contract early in the session.
Planting is taking place in areas of South Dakota, northern IL, OH, and areas of IN but a storm is expected to roll across the Midwest by tomorrow which will halt progress in many areas.
The outlook is favorable for additional work by mid-next week. Bull spreads broke lower midday on profit taking ahead of Friday's USDA report and after ethanol production for the week ending May 3rd averaged 843,000 barrels per day, down 1.6% vs. last week and down 6% vs. last year.
Total ethanol production for the week was 5.9 million barrels. Corn used in last week's production is estimated at 88.5 million bushels, down from 89.9 the week prior.
This crop year's cumulative corn used for ethanol production is 2.99 billion bushels.
Corn use needs to average 91.1 million bushels per week to meet this crop year's USDA estimate of 4.55 billion bushels. Stocks as of May 3rd were 16.85 million barrels, down 1.1% vs. last week and down 21.2% vs. last year.
Implied demand fell to 6.09 million barrels, that's down from 6.56 the week prior. There were no reported ethanol imports for the second week in a row.
July Rice finished down 0.165 at 15.23, 0.17 off the high and equal to the low.
Soy Futures Closed Higher
May Soybeans finished up 15 1/2 at 1479, 6 off the high and 17 1/2 up from the low. July Soybeans closed up 8 1/2 at 1390 3/4. This was 11 3/4 up from the low and 12 1/4 off the high.
July Soymeal closed up 4.3 at 407.6. This was 4.9 up from the low and 3.7 off the high.
July Soybean Oil finished down 0.32 at 48.82, 0.68 off the high and 0.08 up from the low.
The soybean market was trading sharply higher early in the session but by midday the market setback off the highs on news that soybeans are set to come into the US from Brazil or Paraguay.
Traders in Brazil indicated that sales had already been made, vessels had been nominated, and that 3 cargos traded yesterday.
Traders also indicated that famers might be pricing some old crop soybeans as basis levels remain at attractive levels. Calendar spreads remained well supported despite the break in futures as crush margins remain attractive at 45-55 cents per bushel in some areas.
Meal basis levels have held steady this week which is helping to keep margins profitable. November soybeans sank lower into the closing bell with some traders indicating that they see significant downside for the new crop contract given the likelihood that at least some acreage that was intended to have corn planted on it will shift to soybeans.
Wheat Futures Closed Lower
May Wheat finished down 2 3/4 at 696 3/4, 3/4 off the high and 3 1/2 up from the low. July Wheat closed down 3 at 706. This was 6 1/4 up from the low and 6 3/4 off the high.
Spillover pressure from a sharply lower corn market helped to limit the upside advance for wheat futures today but the action was mostly positioning ahead of the USDA report on Friday.
Thoughts that a significant amount of corn planting had been done in areas of the US this week helped to trigger the downside move in the grains. Additional pressure was due to a warmer and drier outlook for the eastern Midwest in the second half of this month which should improve the growth and quality of Chicago wheat.
Rain fell overnight in Kansas with accumulations from Hays, KS to Salina, KS reaching 0.25-0.75 inches. The central third of KS has the healthiest looking crop at this point and the precipitation plus gradual warming of temperatures should improve the growth prospects.
The southwestern third of the growing region remains in the worst shape with very little moisture expected over the next 6-10 days. India reported that their wheat stocks at government warehouses surged more than 76% to 42.7 million tonnes in April.
New crop harvest is underway and the government has attempted to sell stocks in the global market but prices remain uncompetitive due to a price floor set by the government and expensive transportation costs.
The European Union granted export licenses for 267,000 tonnes of soft wheat, taking the marketing year total to 17.1 million tonnes.
July Oats closed up 1 at 378 1/4. This was 1 1/2 up from the low and 5 1/4 off the high.
