Make sure you go into INTEL and look at Sunday night discussion
Weather over the weekend basically has not changed much from Friday. We have moved some rain totals a little here and a little there, but the overall
message is the same. “The pattern has not changed”
T–Storm Weather Summary – The central U.S. will remain divided by a sharp temperature gradient over the next two weeks, leaving the southeast third
to half mild and muggy with maximums often in the 80s, but the northwest third to half quite cool with minimums in the 40s-50s. Large- and smallscale
systems ride the gradient and trigger t-storms in varying areas each day, though the exact location becomes ambiguous with time as the size and
number of systems decreases. The most likely scenario is for: 2.75” to 5.50” in the central / southern Plains and northwest half to two-thirds of the
Corn Belt, 2.00” to 4.00” in the northern Plains (wettest in SD), 1.50” to 3.00” in the southeast third to half of the Corn Belt (wettest in IL), and 0.50” to
1.50” in the Delta (wettest north). The exceptional volume of rain maintains or increases flooding and wetness in the wettest Jun.-May, Jan.-May, and
/ or May since 1895 in the Corn Belt
Planting progress tonight on corn is expected to be around 50%. The slowest pace on record for this week was 62% planted and we feel there is zero
chance this afternoon will not be a new record. In past late years we have had a window open up for planting in LH May-June, but so far the forecast
shows no such window for much of the Corn belt.
The corn – soybean ratio in price is getting a lot of attention now as it approaches 2.1. This ratio is calculated by taking soybeans / corn. We have not
see the ratio as small as it is now since 2012 when if briefly dipped below 2.0. The chart of the day below shows this history. We bring this up because
this ratio is clearly telling the producer to plant corn over soybeans. The problem, of course, is many farmers cannot plant more corn due to excessive
rain. However, there are areas of the country where producers are done or near done planting corn and we hear they will plant more corn if possible.
Another aspect of the corn to soybean ratio favoring corn so heavily is the potential for government payment. This $15 – $20 Bln will get distributed
how?? If it heavily favors beans for the row crop farmer like it did last time will that artificially put more soybean acres in the ground when we clearly
do not need them?? We hear some clarity will come out on this soon, but it has potential to be disruptive to free market forces.
Soybean trading in Brazil has gained momentum in recent days, driven by a wave of Chinese demand, boosting prices and premiums paid at ports
amid a weakening of the Brazilian currency; an estimated 5.5 million tons of soybeans have traded over the past few days, and are slated to leave
Brazilian ports in June, July and August; Chinese demand also comes at a time when the U.S. dollar hit the highest against the Brazilian currency in
more than seven months, boosting the value of Brazilian soybean exports when translated into reais.
Meat Prices are Set to Climb as Swine Fever Claims China’s Hogs; a disease sweeping China’s hog farms is set to hit U.S. meat eaters’ pocketbooks; the
companies that sell Big Mac and Whopper burgers, Jimmy Dean sausages and Dunkin’ bacon sandwiches all expect meat prices to rise this year, as
China imports more pork, beef and poultry to fill a shortfall in its huge hog market.
The United States is likely to permanently lose soybean export market share in China the longer U.S.-China trade talks drag on, a top executive at the
U.S. Soybean Export Council (USSEC) industry group said; China is also unlikely to ever return to importing record volumes of U.S. soybeans, as the
world’s top soy consumer did as recently as 2016, even if trade talks between the two countries wrap up promptly.
America’s largest bank says U.S. agriculture faces a three-pronged crisis; JPMorgan analyst sent a note to investors yesterday calling the fundamentals
of agriculture “rapidly deteriorating; the three-pronged crisis of declining exports, a poor crop of corn and soybeans and the trade war with China, have
created a perfect storm for U.S. farmers; besides tariffs, Chinese import demand for soybeans will likely decline due to the approximate 30% loss of its
hog herd after the outbreak of African swine fever; also noted Brazil and Argentina have produced a near record soybean and corn yield, while the U.S.
dollar strength remains a headwind for global trade.