Brooks Schaffer Market Report for Tuesday April 23

This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

Row crop markets finished last week strong and saw follow through buying to start off this week as well. USDA releases the commitment of traders report every Friday and we saw a bit of a surprise last week in that the funds continue to defend and build their short positions going into the growing season rather than buying them back. There is a lot of growing season ahead and if the tide turns, a large fund short position can make the market way more volatile as they all head for the exits. 

Wheat was the leader with several headlines cited as reasons for the rally. Russia’s production estimates are working lower and Paris wheat made a large move higher today. Stepped up Russian attacks on grain infrastructure adds some tailwinds. Cold weather in the US Plains and corn belt also adds to wheat buying as the crop is very mature for this time of year after the stretches of warm weather. Corn was pulled by strength in wheat but has managed to achieve a topside breakout from the multi-week sideways range but needs additional follow through sometime this week to bring short covering strength. In addition to the strength in wheat to benefit corn, strong export inspections helped bring buying into the corn market. 

USDA released planting progress Monday afternoon at 4pm. It showed corn was 12% planted which was right on the money of the trade expectations. That compares to 6% last week, 12% last year, and the average of 10%. For soybeans, USDA estimated we are 8% planted which is a point higher than trade expectations, 3% last week, 8% last year and average of 4% on this week. Cotton was estimated at 11% planted compared to 8% last week, 11% last year and 11% average. Winter wheat was rated 50% good or excellent which is 4 points less than the trade was expecting and down 5% from last week. However this is still much higher than the 26% rated good/excellent last year. The crop was 17% headed compared to 11% last week and 13% on average. 

Market will start paying closer attention to US weather as we get the crop planted and we are waiting for the market moving May WASDE report that comes out on May 10th at noon.