By Joe Lardy
Industry data shows food service sales in the week ending May 10 were down 40% from last year, an improvement from a 66% decline in late March. Pizza sales are up 14-27% through mid-May.
Ukraine’s grain trader’s union believes 2020/21 corn exports could hit a record 30 MMT, which would be up 1 MMT from this year. BAGE estimates Argentina’s corn harvest is 47% complete vs 36% 5 year average and still expects a 50 MMT crop. IMEA reports Mato Grosso has begun corn harvest at 1% vs 2% last year. DERAL lowered corn condition ratings in Parana from 53% to 45% good-to-excellent vs 84% last year. Conab is currently estimating Parana production at 12.3 MMT vs 13.5 MMT last year.
Crop Progress showed U.S. corn is 88% planted (82% avg) vs 88-90% estimates, 64% emerged (58% avg), and condition is rated 70% good-to-excellent. North Dakota is just 54% planted and past the insurance date. Ethanol production was 724,000 barrels/day vs 663,000 bpd last week and down 31% from last year. Stocks were down 400,000 barrels to 23.2 million. Margins were up 2 cents to 3 cents per gallon. Corn export sales were weak at 427,000 tonnes, missing expectations. A big cancellation to unknown brought the total down.
Forecasts continue to show rain in the Black Sea region in the next 10-15 days, but little rain for France, UK, and Germany. French wheat ratings fell 1 pt to 56% good-to-excellent, their lowest since 2011. According to Reuters, Ukraine’s winter wheat harvest could drop to 23.3 MMT, down from 26 MMT last year. Ukraine’s grain trader’s union projects 2020/21 wheat exports at 18 MMT vs 20.5 MMT this year. BAGE says Argentine wheat planting is 13.4% complete. Soil moisture is eroding quickly, so farmers are moving fast.
Spring wheat is 81% planted (90% avg) vs a 77% estimate and 51% emerged (65% avg). The winter wheat crop is 68% headed (72% avg) with conditions rated 54% good-to-excellent. Oklahoma HRW condition improved from 53% last week to 60% g/e. Wheat export sales were very good for new crop at 497,000 tonnes.
Cofeed reports China’s crush for the week ending May 22 was a marketing year high 2.1 MMT and up 10% from the previous week. BAGE estimates Argentina’s soybean harvest is 97.2% complete and still expect a 49.5 MMT crop. There are reports that China bought as many as 10 cargos of Brazilian soybeans this week.
Soybeans are 65% planted (55% avg) vs 68-72% estimates and 35% emerged (27% avg). IA is 92% planted vs 64% average. Soybean export sales were ok this week at 644,000 tonnes which was in line with expectations. China was the biggest buyer this week at 192,000 tons.
Cash cattle backed off this week dropping $1 to $3 with values around $115. Packer margins are still sky high at $930/head. Yesterday margins topped $1,000/head. A Tyson Foods pork processing plant in Iowa is shutting down after officials revealed that 22% of workers tested positive for COVID-19. China is continuing to see new cases of African Swine Fever.
WTI is on track to finish the month of May up around 74%. The second best month ever was in September of 1990, with a monthly gain of 44.62%. According to a Reuters report, Saudi Aramco sees that the oil market needs support and they would like to continue the supply cuts through the end of the year. Russian oil companies may not see it that way however. If the demand increases, they see no reason for the continued supply cuts. The Russian energy Minister Alexander Novak anticipates that the oil market will balance in June and July as demand continues to recover.