Market Commentary  04/22/19 2:41:33 PM Printer Friendly VersionPrinter Friendly Version

Monday, April 22, 2019

Despite a strong weekly U.S. corn export inspection number this morning, corn futures closed lower as technical selling combined with a more favorable forecast weighed on prices.  As of midday, funds were estimated to have sold approximately 2,000 contracts of corn.  For the week ended 4/18/19, U.S. corn exports totaled 53.3 mln. bu.  This was notably higher than market expectations and was the highest total recorded in the last 28 weeks but still sharply below last year’s same week exports at 68.4 mln. bu.  Weekly corn inspections will need to average nearly 38 mln. bu./wk. through the balance of the marketing year in order to reach USDA's recently-lowered 2.3 bln. bu. export projection.  Traders continue to keep a close eye on the forecast.  Recent weather models look more conducive to field work/planting in some areas.  The Midwest is expected to see generally below average precipitation and near normal temperatures for the week across the central regions, while the north is expected to see several rain events.  The forecast for the Delta and Southeast indicates the potential for some net drying towards the end of the week. This afternoon NASS will release their updated U.S. corn planting estimate.  Traders are looking for a number near 7% planted.  For reference, this compares to 3% last year and a 6-year average of 12%.  Corn harvest continues to move along in Argentina.   Recent estimates suggest just over 30% of their corn harvest in complete, which is well ahead of the 5-year average at 23%.  
Bean futures ended the day weaker, as disappointing weekly U.S. soybean export inspections coupled with the lack of a U.S./China trade resolution hung over the market.    Weekly U.S. soybean exports last week totaled just 14.0 mln. bu. This was below last week’s 17.5 mln. bu. total and below last year's same-week exports of 17.4 mln. bu.  For reference, not a single week's exports have reached the current average "needed" pace to reach USDA’s annual projection of 1.875 bln. bu. since mid-February.  In regard to U.S/China trade negotiations, U.S. negotiators are scheduled to travel to China the week of April 29th for the 7th round of face-toface meetings, while China’s trade team is expected to travel to the U.S. the week of May 6th.  Persons close to the talks say the intention is to have terms wrapped up by late May/early June.  In other trade news, the U.S. won a WTO ruling last Thursday against China's use of tariff-rate quotas for imported rice, wheat and corn, which it successfully argued limited market access for U.S. grain exports.  This marked the second U.S. victory in as many months and comes amid U.S./China trade talks and on the heels of Washington clinching a WTO ruling on China's price support for grains in March. This afternoon traders will get their first look at the U.S. soybean planting pace when NASS releases their crop progress report at 3pm CST.  Analysts expect to see a number near 2%.

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