This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Wheat was the leader to the upside to start the week, as the showers in the Plains missed some areas that badly needed the moisture. That sounds very familiar to us in the Southeast, as drought conditions continue to worsen. Corn export inspections were impressive again this week and at the top end of expectations, but off a little from last week’s blistering pace. We have already loaded so much of the export corn, we can basically coast and still reach USDA’s lofty export target. If we keep going at an increased pace, USDA is going to have to increase the target.
Grain and oilseeds have tried to divorce themselves from just following crude oil and war headlines, and that was evident Monday. Tensions seem to be escalating, and energy markets moved higher but did not pull the ag markets with them. After talks fell apart over the weekend, the U.S. moved to block all shipments leaving from Iranian ports. This is an effort to put more pressure on the Iranians, who have been able to capitalize on the higher energy prices caused by the war. This will also put pressure on the countries that have been receiving shipments of energy products from Iran throughout the conflict. Two of the biggest of those are China and India. As of this writing, no ships had challenged the blockade yet, but the Chinese Defense Ministry released a statement saying it had agreements with Iran and no other country should interfere with its affairs. We do not know yet if this will escalate the conflict or put the desired pressure on the Iranians to bring them back to the negotiating table. Just when the grains have tried to distance market action from the conflict in the Middle East, they may get pulled back in. If China takes a bigger role due to this blockade, it may have implications for the scheduled meeting with Trump and Chinese President Xi in May.
USDA released the weekly crop progress report Monday at 4 p.m. It showed winter wheat conditions declined by 1 point from last week, estimated at 34% good/excellent compared to 47% good/excellent last year. Corn planting was estimated at 5% complete vs. 6% expected. That compares to 3% last week and 4% on average. Soybean planting was estimated at 6% complete vs. 2% expected. That compares to 2% last year and 2% on average.