This week’s National Agricultural Statistics Service Crop Progress report likely was seen as bearish, since crop conditions are good, and progress was ahead of last year and the five-year average.
The report showed that 95% of the nation’s corn crop had been planted as of Sunday, compared with last year’s 92% and the 2016-2020 average of 87%. It was very near published trade expectations of 96% complete.
Eighty-one percent of the crop was emerged, compared with the average of 70% and last year’s 76%.
This report was the first one of the year to include crop conditions. Sixty-six percent of the emerged crop was listed in good to excellent condition, compared with 64% last year.
WEATHER REPORTS UNSETTLING; EXPORTS STRONG
A dry, warm weather forecast for the Dakotas this week was seen as supportive for corn futures Tuesday, market analysts said.
In addition, continued concerns about Brazil’s second crop amid dryness there were supportive early, market analysts said.
But what really lit the fire under speculators were the export inspections, the analysts said. Corn export inspections for the week ended May 27 came in at 2.049 million tonnes, compared with trade expectations nearer 1.5 million to 2.0 million.
The USDA said China and Mexico were principle buyers of US corn. China always causes some angst among corn traders since it is such a huge market, especially since they have been working hard to rebuild their hog herd post African Swine Fever culling.
The USDA has said US farm exports could hit a record high for this crop year, further reducing ending stocks projections. China could wind up being a major buyer of US agricultural products, the USDA said.
The weekly drought monitor, released Thursday, showed strengthening drought in North Dakota, with some areas reaching exceptional drought status for the National Weather Service.
As a side note, it’s important to remember that the Drought Monitor is a measure of deviation from normal. So, for an area like North Dakota to be rated exceptional drought, is something, a market analyst said.
In addition to North Dakota, South Dakota, most of Minnesota, northern Iowa, southern Wisconsin, the lower peninsula of Michigan also were rated at abnormally dry to moderate drought.
That is a major portion of the Corn Belt for the US, and is giving traders and end users heartburn.
Once corn futures prices started rising Tuesday on fundamental factors, technical traders kicked in with money of their own to propel the market sharply higher for the day, market analysts said.
And it didn’t hurt that stock market prices moved higher on the day either, the analysts said.
In the end, though, profit taking cut the day’s gains away.
CATTLE, BEEF RECAP
Fed cattle traded last week at $118 to $120 per cwt on a live bases, steady to $1 lower than the previous week. Dressed-basis trading was at $188 to $191, steady to down $1.
The USDA choice cutout Tuesday was up $3.59 per cwt at $334.56, while select was up $5.55 at $306.45. The choice/select spread narrowed to $28.11 from $30.07 with 89 loads of fabricated product and 50 loads of trimmings and grinds sold into the spot market.
The USDA reported Tuesday that basis bids for corn from livestock feeding operations in the Southern Plains were up $0.02 to $0.07 per cwt at $1.12 to $1.19 a bushel over the Jul futures, which settled at $6.86 1/2 a bushel, down $0.02 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $136.46 per cwt up $0.21. This compares with Tuesday’s Aug contract settlement of $149.15 per cwt, down $2.20.