Evening Report | April 20, 2023

Evening Report
Evening Report
(Pro Farmer)

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

 

Warm, wet forecast for eastern Corn Belt through July... The National Weather Service (NWS) extended forecast calls for increased chances of above-normal temperatures across the Southern Plains and nearly all the eastern half of the country during the May through July period. There are “equal chances” for average, below-average and above-average temps cross the northern Corn Belt and Central/Northern Plains during the period. The 90-day forecast calls for above-normal precip over the southeastern quadrant of the country, including all but the far northern areas of the eastern Corn Belt. The remainder of the Corn Belt has “equal chances” for precip.

The entire Southern Plains region is expected to see above-normal temps, while the area of below-normal precip shrinks to West Texas and much of the panhandles of Texas and Oklahoma. Kansas is expected to have “equal chances” for precip through the HRW harvest.  

The Seasonal Drought Monitor calls for drought to persist or develop across the western half of Texas and Oklahoma, and all but the northeastern portion of Kansas through July. Drought improvement or removal is expected across Nebraska, northwestern Iowa, southwestern Minnesota and pockets of the Northern Plains during the period.

Click here for related maps.

 

Southern Plains drought intensifies... As of April 18, 47% of the U.S. was covered by abnormal dryness/drought, unchanged from the previous week. USDA estimated 50% of U.S. winter wheat areas were covered by drought, up one point from the previous week. Drought coverage for winter wheat included 10% “moderate” (D1), 10% “severe” (D2), 10% “extreme” (D3) and 19% “exceptional” (D4).

In HRW areas, dryness/drought covered 87% of Kansas (57% D3 or D4), 56% of Colorado (5% D3, virtually no D4), 64% of Oklahoma (43% D3 or D4), 78% of Texas (18% D3 or D4), 100% of Nebraska (29% D3 or D4), 89% of South Dakota (0% D3 or D4) and 67% of Montana (0% D3, no D4).

The Drought Monitor noted, It was “a dry week for most of the central and western sections of Texas and Oklahoma meant conditions persisted or deteriorated there. Most locations across central and northern Oklahoma have 3-month SPEI below the 5 percentile threshold, with 90-day precipitation 3 to 5 inches below normal. A majority of Kansas and portions of Nebraska remained entrenched in D3 to D4 (extreme to exceptional drought). Some D3 and D4 expansion took place there, but a few small areas saw limited improvement from localized rainfall. Some areas of deterioration were also noted across D0 to D2 areas in central and eastern Colorado, but most of the state was unchanged from last week.”

In SRW areas, dryness/drought covered 14% of Missouri, 0% of Illinois, 0% of Indiana, 0% of Ohio, 0% of Michigan, 0% of Kentucky and 0% of Tennessee. None of the drought in these SRW states is classified as D3 or D4.

USDA estimated drought covered 28% of corn production areas, 20% of soybeans and 21% of spring wheat.

Click here for additional information and related maps.

 

Exchange cuts Argentine soybean crop forecast... The Buenos Aires Grain Exchange cut its Argentine soybean estimate by 2.5 MMT to 22.5 MMT, as yields remain even lower than anticipated. The exchange kept its Argentine corn crop estimate at 36 MMT.

The exchange rated the Argentine soybean crop 3% good/excellent (unchanged from the previous week), 33% fair (up one point) and 64% poor/very poor (down one point). It rated the country’s corn crop 6% good/excellent (unchanged), 40% fair (down one point) and 54% poor/very poor (up one point).

 

IGC raises global corn, soybean crop forecasts... The International Grains Council (IGC) raised its forecast for 2023-24 global corn production, driven primarily by an improved outlook for the United States. IGC now forecasts global corn production at 1.208 billion MT, up 6 MMT from its prior outlook. U.S. corn production was seen at 381.8 MMT, up from a previous forecast of 377.7 MMT and last year’s 348.8 MMT output. IGC left its 2023 Ukraine corn crop projection at 21 MMT, though that would be down 6 MMT from last year.

IGC raised its 2023-24 world soybean production forecast 2 MMT to 401 MMT, which would be up 31 MMT from 2022-23.

IGC maintained its 2023-24 world wheat crop outlook at 787 MMT, down from 803 MMT last year.

 

USDA will show feedlot supplies continued to contract... USDA is expected to show feedlot supplies contracted versus year-ago for a seventh straight month in Friday afternoon’s Cattle on Feed Report. Traders expect the April 1 feedlot inventory to be down 5.0% from year-ago to 11.5 million head, the lowest for that date since 2017. March placements are expected to have dropped 5.2%, with marketings down 0.9%.

Cattle on Feed

Avg. Trade Estimate

(% of year-ago)

Range
(% of year-ago)

Million head

On Feed on April 1

95.0

94.4 - 95.5

11.5

Placements in March

94.8

91.5 – 99.0

1.887

Marketings in March

99.1

97.2 – 100.0

1.982

 

U.S. lawmakers want to toughen the bars against imports from China’s Xinjiang region... Members of Congress say possible “loopholes” might be allowing goods from a largely proscribed region of China to enter the U.S. even as items are being halted at the border. The Wall Street Journal reports that U.S. Customs and Border Protection says it has stopped nearly $1.1 billion in goods with possible links to China’s Xinjiang region since an anti-forced labor law blocking many imports went into force last year. To some lawmakers, that suggests companies are still trying to ship prohibited goods from the region. The law has raised the profile of trade compliance in supply chains, and companies still appear to be figuring it out. Customs data shows the agency has denied entry to 490 of 3,588 shipments stopped for inspection, while 1,778 are still under review. The rest have been released into the U.S.

 

Why did VIX hit a 52-week low?... The VIX, the so-called fear index, is trading at the lowest levels since the S&P 500 hit its all-time high in the early days of 2022 (just over 4,818). The Sevens Report notes that the single, most-dominant market dynamic right now is the deeply inverted bond yield curve, so it looked back to other times in history when the yield curve was inverted, the economy was on the brink of (or in) a recession, and stocks were either in or falling into a bear market. Sevens Report concludes: “Today, we are looking at the yield curve hovering just above its deepest inversion since the early 1980s while the VIX is sitting on fresh 52-week lows and obviously nowhere near overbought levels on the weekly time frame, a development that preceded all three of the major market bottoms in the ‘VIX era’ of market history (the VIX was first published in real time in 1993). That suggests we remain in a ‘calm before the storm’ holding period and until we see the VIX reach overbought territory on the weekly chart (via the RSI indicator), among multiple other developments of course, it will be hard to believe the market is poised to casually cruise towards new record highs from here (i.e. the bottom of this bear market is not in).”

 

Latest News

Timeline and Issues in Getting Baltimore Port Channel Reopened
Timeline and Issues in Getting Baltimore Port Channel Reopened

Exxon Mobil and SAF | Fed governor says ‘no rush’ to lower rates | Russia aids Cuba | Key USDA reports today

Cattle Strength Wanes | March 28, 2024
Cattle Strength Wanes | March 28, 2024

Japan works to support Yen, Eurozone cuts production forecast and the Biden Administration will repair Baltimore Bridge...

Ahead of the Open | March 28, 2024
Ahead of the Open | March 28, 2024

Corn, soybeans and wheat traded in tight ranges overnight, with grains showing relative strength into the break.

Weekly wheat sales exceed expectations, while soybeans miss
Weekly wheat sales exceed expectations, while soybeans miss

Weekly wheat sales were just above the pre-report range for the week ended March 21, while soybean sales missed the expected range by 36,000 MT. Corn sales held steady at 1.21 MMT.

First Thing Today | March 28, 2024
First Thing Today | March 28, 2024

Corn, soybeans and wheat traded in narrow ranges during the overnight session ahead of USDA’s reports later this morning.

After the Bell | March 27, 2024
After the Bell | March 27, 2024

After the Bell | March 27, 2024