By Joe Lardy
President Trump threatened that if China didn’t fulfill its $200 billion spending promise on the Phase 1 agreement, he would terminate the deal. The New York Times had a piece highlighting the discontent against China is growing across the globe as many believe that China didn’t handle the outbreak correctly and report it to the world. Trade negotiators from both the U.S and China held a phone call discussing progress with phase 1. Both sides agreed that obligations would be met. Forecasts are expecting a widespread frost to occur across the Midwest on Saturday with parts of Michigan, NE Indiana, central and northern Ohio, central Kentucky, Wisconsin and northern Minnesota expecting to see a hard freeze that could damage soft wheat as well as emerging corn.
BAGE reported that Argentine corn harvest is now 38% complete vs 37% complete last week and a 31% 5 year avg.
Corn planting is 51% complete com-pared to the 5-year average of 39%. Planting jumped up by 24% this week! Minnesota is 76% done and Iowa is a little quicker at 78% complete. Corn emergence was at 8%. The 5-year average is 10%. US planting progress on Monday is expected to show corn planting 68-71% complete vs. 56% Ethanol production increased by 61,000 bpd this week to 598,000 bpd. This is the first increase in production after 8 straight week of production declines. Ethanol inventories decreased by .7 million to 25.6 million barrels, dropping back from the recent highs. Corn sales met expectations for old crop at 744,600 tons but were a little soft on new crop at just 97,500 tons. Mexico was again the leading buyer this week. Traders will now look towards next week’s WASDE report to see possible changes in old crop demand and in turn an increased carryout. The trade also looks toward the first look at the 20/21 balance sheet as March planting intentions will be factored into the data.
The FAO reported that world wheat production in 20/21 will be stable at 762.6 million tonnes, stating that losses in the EU, Ukraine and the U.S. will be offset by larger harvests in Australia, Kazakhstan, and Russia.
Wheat conditions in the good/excellent category improved by 1% to 55%. Winter wheat heading was at 32%, compared to the 5-yr average of 38%. Spring wheat planting is at 29% complete, trailing the 5 year average of 43%. Spring wheat emergence was 6%. The 5-year average is 16%. Wheat markets traded higher due to frosts forecasted for this weekend in the Midwest that may threaten some soft red winter wheat. Hard red winter wheat continues to see dryness concerns and will need the rain that is forecasted over the next week and a half. Wheat export sales at 244,800 tons were within expectation of 50,000-300,000 tons.
Malaysian palm oil futures rose as much as 4% during today’s session due to hopes of seeing some demand recovery as countries ease lockdowns. Chinese soybean imports in April fell by 12% compared to a year earlier due to delayed cargoes from Brazil.
Soybean planting is at 23% complete compared to the 5-year average of 11%. This is the faster planting pace we’ve seen. US planting progress on Monday is expected to show soybean planting 42-44% complete vs. 23% average. Soybean export sales were ok but were near the low end of expectations at 653,000 tons. China was the biggest buyer this week at 288,000 tons.
The Tyson CEO said panic buying has subsided at US grocery stores. He also projects an increase in total protein available as closed meat plants reopen in q3 and q4. Boxed beef values are sky high and records are being smashed. The previous high value for boxed beef was $265 in May 2015. We hit $459 this week. Wow. Due to the high boxed beef value, packer margins are well over $700/head.
The crude market is trading higher this morning and is set to see a second consecutive week of gains as demand begins to return due to easing lockdowns across the globe. US shipped their first crude oil shipment to China since Dec. 2019 and should arrive in mid-May. US oil producers on pace to cut 1.7 million bpd of production by the end of June. US national gasoline prices are averaging $1.81 per gallon vs. $2.89 a year ago, according to GasBuddy.