This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
There is not a lot new to talk about in the row crop markets right now. Brazil is finishing up their soybean harvest. They are expected to be past 90% by the end of the week. Basis is firming up down there as we would expect as harvest comes to a close. It is too early to get too excited about US growing season weather. The National Weather Service’s Climate Prediction Center released their updated three month guidance for May, June and July and there was nothing in there to excite the bulls or the bears. They predicted temps higher than seasonal levels for most of the Midwest and Southeast. For precip, they have equal chances for above or below seasonal levels in much of the US Midwest. For the Southeast, they call for above seasonal precipitation.
There is nothing right now in the news to convince the funds to cover their shorts or to get end users to rush to get coverage. We will continue to stay in the same range until there is. We got NOPA crush report this week that showed another all-time record US soybean crush for any month. That is the third record monthly crush we have made. It was a little below what the market was expecting though and soybean oil stocks continue to build. Ethanol grind was down significantly this week. It is the first week in 11 that ethanol production has been below the level needed to reach USDA’s target. We hope this is a one off and not a trend but we will have to see a few more weeks of data to see. Despite production dropping so much, ethanol stocks did not drop very much but gasoline stocks did drop indicating that strong demand does remain for gas despite a rise in prices.
Market will be watching weather and the weekly planting progress that USDA will give us each Monday at 4pm. We will also start getting crop condition ratings for corn and beans in the weekly progress reports as well. The next big market moving report will be the May WASDE from USDA which comes out May 10th at noon. Until then, expect the market to continue to drift unless we get some market moving news from somewhere in the world. There is a lot of turmoil in the world right now that is staying just below the surface so its not being priced into the market. That could quickly change.