Crop Progress Below Expectations

Good Morning from Allendale, Inc. with the early morning commentary for May 27, 2020.

Grain Markets were slightly higher on trade optimism, weaker U.S. dollar and solid short covering in all three main markets.  But gains were capped over looming concerns about U.S.-China trade tensions, weak demand and larger global supplies.  Traders will continue to keep an eye on the sky over the next few weeks as we head into crucial planting time.

USDA Weekly Crop Progress Report showed corn planting at 88% complete (90% expected, 80% last week, 55% last year, 82% average).  First corn condition rating of the year was at 70% GTE (59% GTE last year in early June, in line with average of last 10 years).  Soybean planting at 65% complete (69% expected, 53% last week, 26% last year, 55% average).  Hard red Spring wheat planting at 81% complete (77% expected, 60% last week, 80% last year, 90% average).  Winter wheat conditions at 54% GTE (53% expected, 52% last week, 61% last year).  Cotton planting at 53% complete (44% last week, 53% last year, 53% average).  

White House adviser, Larry Kudlow said President Trump is so “miffed” with China over the spread of coronavirus and other matters that the U.S.-China trade deal is not as important to him as it once was.  “And incidentally we welcome any American companies in Hong Kong or China mainland. We will do what we can for full expensing and pay the costs of moving if they return their supply chains, and their production to the U.S. That’s one of our key policy issues,” Kudlow said.

USDA weekly grain export inspections showed corn exports at 1,092,000 tonnes (1,000,000 to 1,400,000 expected), soybean exports at 333,000 tonnes (350,000 to 600,000 expected) and wheat exports at 458,000 tonnes (400,000 to 600,000 expected).

Private exporters reported to the USDA export sales of 264,000 metric tons of soybeans for delivery to China.  Of the total, 66,000 metric tons is old crop delivery and 198,000 metric tons is for new crop delivery.  There was also export sales of 216,000 metric tons of soybean meal for delivery to unknown destinations during this marketing year.

Ukraine will continue to export wheat even though the quota agreed with traders for the 2019/20 season which runs to the end of June has been used up, deputy economy minister Taras Vysotskiy said.  The APK-Inform ag consultancy said the wheat export quota of 20.2 million tonnes had been exhausted.

Locust attacks have alarmed India’s farmers as experts warn of extensive crop losses if authorities fail to curb fast-spreading swarms by June when monsoon rains spur rice, cane, corn, cotton and soybean sowing.  Desert locusts have engulfed around 35,000 hectares in India’s seven states, threatening vegetable and pulse crops, government officials and farm experts said.

Cash cattle traded strong last week at $116.13 for the 35%-65% choice category and $117.06 for All Grades.  This was sharply higher than the previous week’s $108.66 and $112.31.

Iowa (which produces a third of U.S. pigs) will become the first state to provide financial aid to farmers who must dispose of hogs euthanized due to the coronavirus pandemic, the state’s ag department said.  Iowa’s ag department requested $24 million to help farmers pay to dispose of their hogs, spokeswoman Keely Coppess said.  The money will come from the state’s portion of federal coronavirus relief funds.  The final amount distributed to farmers will depend on how many apply for aid and how much money the department receives, Coppess said.  (Reuters)

Dressed beef values were lower with choice down 11.25 and select down 14.16.  The Feeder cattle index is 126.44.  Pork cut-out values were up 0.69.

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