04/16/19 — Crop progress was out on April 15 (tax day) with planting falling further behind in nearly all crops as the cold/wet spring still has not warmed or dried soils enough to allow planting in most areas. Corn planting progress is only 3% (up 1% last week) vs. 5% average so we’ve now fallen further behind normal. Cotton is 7% planted (up 1% last week) and equal to average. Sorghum is 16% planted (2% planted last week) vs. 19% normally so now 3% behind normal. Rice is 26% planted (+7% last week) and now 9% behind normal.
Sugarbeets are 8% planted (up 5% last week) vs. 16% normal so 8% behind normal pace. Oats are 30% planted (+3% last week) vs. 40% normally so we are 10% behind normal. Most all spring planted crops are falling further behind normal, and next week’s weather forecast isn’t much better. Its likely by the end of April, the U.S. planting pace will be one of the slowest ever and with soils still saturated from a wet fall and winter and cool spring, it could be awhile before much gets done. Last year’s memory of a slow start and rapid planting in May seems to be lulling the market into complacency — perhaps not a good idea?
Winter wheat is 6% headed, 3% behind the normal pace while winter wheat conditions remain high at 60% G/E, equal to last week but well above last year’s 31% rating. HRS wheat is only 2% planted (+1% last week) vs. 13% normal so we are 11% behind normal. Barley is 8% planted, 11% behind normal and most progress is being made in the northwest, with almost no progress made in the northern plains region where most of the barley is typically planted.
The year is clearly very late, and frankly its going to take some time to thaw out and dry out soils which are very wet this spring. Soil moisture ratings are still extremely high, with topsoil rated 94% adequate/surplus (+1% last week) vs. only 77% last year at this time. Subsoil moisture is 93% rated adequate/surplus (+1% last week) and well above last year’s more ideal rating of 73%. So the US as a whole is very wet, and it is going to be a late planting year not just because of the slow spring thaw, but also the saturated condition of soils here in mid-April yet.
Weather forecasts are calling for mostly normal precip now across most of the US the next 14 days, and perhaps a little above normal in the southeast U.S. Temps will average above normal for most of the U.S. growing region except the southeast, which will see below normal temps for the next 14 days. That is a bit wetter in the western corn belt than yesterday, and will likely mean slow planting progress in most of the U.S. through April. There is just scattered rain today in the U.S., mostly in the northern 1/3, but another storm will move through the Corn Belt by the weekend.
Treasury Secretary Steven Mnuchin updated many reporters early this week on the China trade talks, with progress being made such that he suggested we are in the final stages of negotiations. Once the China deal is done, then the U.S. can put their full attention to the European Union and Canada, both of which are sharpening their sabre’s to prepare for negotiations. The problem both have, though, is that the U.S. buys much more from them than they buy from the U.S. So essentially like the saying goes “Talk is cheap, it takes money to buy whiskey!” They talk like they are going to be tough negotiators with the U.S., but how can you be too tough when you gain more than you lose under current conditions?
USDA gave us their monthly S/D report on April 10, with most of the U.S. numbers correctly anticipated by the market as most came from the stocks numbers released on March 29. Corn stocks of course were up to 2.035 billion bu, about 22 mb larger than expected and up from 1.835 in March. Soybean stocks were 895 mb, about 18 mb smaller than expected and down 5 mb from March. Wheat stocks were 1.087 billion bu., about 11 mb larger than expected and up from 1.055 in March. Overall, it was slightly negative corn, negative wheat, and friendly soybeans. But like most April reports, it didn’t amount to anything the market really wanted to trade, as the new crop 2019 year is upon us, and weather forecasts are more important than old news like U.S. stocks numbers.
In numbers that were updated based on recent weather, Argentine corn was up 1.0 MMT to 47 mmt, Brazil corn up 1.5 mmt to 96 mmt, and Brazil soybeans up 0.5 mmt to 117 mmt. Overall, the drought ended in Brazil by early March, and so small increases came due to improving late season crops. These numbers were perhaps the most bearish as SAM production updates is actually new information rather than a rehash of US numbers.