Corn came out stronger today until the MFP 2.0 announcement

May 23, 2019



Corn came out stronger today until the MFP 2.0 announcement muddied the water on acreage thoughts as it closed .0475 cents lower at 3.8975 for July futures. There will be a farm payment, but it’s not known how much per acre. The fact that acreage must be planted in 2019 to receive said payment has the trade thinking there will be far less Prevent Plant acres than currently estimated. The weather outlook continues to look wet for next 7 days but with a little less rain in IA, IL, IN, and OH, and some drying in the Delta. We didn’t see as much farmer selling today as we saw earlier in the week and the domestic basis is a mixed bag weaker in West where corn is planted and stronger in the East where it is not. The CIF corn market was off 3 cents today nearby while barge freight was higher due to river closures. Corn weekly export sales this morning were in line with estimates with 442,000MT for 18/19 and 183,900MT for 19/20. Marketing year corn export sales to date fall short of the seasonal pace needed to hit USDA’s target by 193Mbu compared to 177Mbu last week. Buenos Aires Grain Exchange Thursday pegged the nationwide Argentine overall Corn harvest at 36.1% complete that compares to last week’s 34.0% and the long-term average at 37.2%.


Soy Complex

Soy complex slipped today, as markets trying to decipher new USDA support package. SN9 settled 7 cents lower @ $8.21 ½, SMN9 down $1.10 @ $297.20, and BON9 slammed 53 ticks settling @ 26.78 (WTI Down 5.7%, $3.51 @ $57.91). “N” crush slipped 1 ¼ cents @ $1.27. The Support program doesn’t give much detail (unfortunately idiom “Devil is in Details” 1st thing that comes to mind), other than $16 BLN Farm Aid Package, includes $1.4 BLN of Food Purchases, $100 MLN on Market Development, and $14.5 BLN for Direct Payments. Payments will be based on trade damage (exports to China, EU, & Turkey) per county. Aid payment will be single rate per county not per commodity. Payments still being discussed w/ OMB; 1st payment scheduled for July/August, the 2nd in late fall, and the final payment in early 2020. USDA not releasing payment rates currently. Details suggest if farmers decide not to plant acres, by taking PP from insurance policy, this will make them ineligible for current Aid Package payments. No mention of payments, or eligibility limits, but other programs are capped @ $125,000, or gross income exceeding $0.9 MLN. Stay tuned… Export sales for beans were 535.8 TMT (19.7 MBU), featuring Unknown taking 225.5, Indonesia 78.0, China 71.0, & Egypt 55.0. Meal sales 188.0 & Oil sales 9.1. NWS 6-10 & 8-14 look the same; wet Midwest through June 6th.



Wheat firm overnight, up 5-6 c for the winters.  Corn sold off and wheat followed, following corn, but traded weaker on corn weakness.  WN closed 1 ½ c lower with a 19c trading range.  KC closed 7c lower after a 18c trading range, with MPLS down 9 1/2c in a 16 1/2c trading range.  Export sales were thought to be disappointing at 14.5 mil bu which puts YTD at 945 mil bu.  This puts sales ahead of the USDA estimate of 925 mil bu.  New crop sales were 344,900 mt.  The Russian Deputy Ag Minister suggested Russia’s wheat exports would drop by 1 mmt to 37 mmt.  They suggested the reduction would be due to the need to increase domestic stocks after last year.  They are projecting 75 mmt for wheat production.  Plenty of weather issues to cause quality problems but the market doesn’t seem concerned about that.



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