“Last USDA reports didn’t include the US flooding impact but we get another reason to pay attention to the weather: snow storm in the USA, Asians sowers, low-temperature condition in Europe. And grain markets will be higher as hopes for a deal between the US and China has the market cautiously optimistic one more time, as China and EU also.”

Elena Faige Pitek (Neroba) Head of Analytics Marcopolo Commodities SA This day market cautious on weather conditions all over the world. Last USDA reports didn’t include the US flooding impact but we get another reason to pay attention to the weather: snow storm in the USA, Asians sowers, low-temperature condition in Europe. Some regions faced with lack of soil moisture too. Planting will delay for sure, and grain markets will be higher as hopes for a deal between the US and China has the market cautiously optimistic one more time, as China and EU also. It was mildly encouraging to hear that the Chinese commerce ministry has confirmed that it is a request by the USA Grains Council to lift anti-dumping tariffs on DDGs. By now means does this assure that they will comply with the request, but it is a positive step. A second cyclone blizzard hit the USA limited the movement and processing of corn, soybeans, and wheat. The USA Agriculture Department currently has no program to cover the catastrophic losses of grains in storage from the widespread flooding, they even can’t calculate it for sure. Such words could be part of the manipulation. SOYBEANS Brazil’s soybean production for 18/19 was estimated at 113.82 MMT by CONAB last week, a revision of 366,000 MT higher than their previous number and still well below USDA and most of the private estimates. Argentina’s soy production will likely reach 56 MMT for this season, 2 MMT more than previously estimated, the Rosario grains exchange said. This compares with the latest USDA estimate of 55 MMT beans and last years drought-stricken 37.8 MMT beans. The quality of the soybeans could be impacted especially if there is a return of wet weather. The soybean crop in Argentina was 6.4% harvested late last week compared to 15.3% last year at this time. In the northern and the southern areas, the soybeans are 14-17% harvested with these two areas representing approximately two-thirds of all the soybeans harvested thus far. According to the Buenos Aires Grain Exchange, the average yield of all the soybeans harvested thus far in Argentina is 4,2 kg/ha. The very good yields in central Argentina are expected to compensate for what is expected to be lower soybean yields, especially in the southwestern production areas. In their weekly crop report, the Buenos Aires Grain Exchange rated the soybean crop at 9% poor to very poor and 52.3% good to excellent, which is a slight improvement compared to last week. The soil moisture for the soybeans was rated 11.6% short to very short and 38.0 optimum to surplus, which was a slight improvement. The early planted soybeans are 65% mature, while the later planted soybeans are 21% mature. The Rosario Exchange estimated that in the core production area of Argentina, 40% of the soybeans have been harvested with yields averaging 4,3 kg/ha. All this stuff is mainly bearish spatially on Trade War, huge US stocks and low China’s demand.

WHEAT Heavy snow accumulations in the US North are pushing back planting into May for much of the Spring Wheat area. The US wheat planting ratings are steady and much less average. Ukraine gets some rains just in time, as 87% of spring wheat planted. EU domestic wheat prices get higher as per dry and cold weather conditions for last weeks EU production expectations fall. In MENA region the season started with rain support at autumn, but now it’s also dry. Heartbreaking pictures are getting from Iran were some field covered with water and loses can get up to 15%. India is under Monsoon, El Nino has drooped. Russia is quite good, they planted 1.9 million hectares of spring wheat, 2.5 times more than last year and they could get another record crop or near it. Global wheat supplies are up while world wheat production for 2018/19 is projected at 732.9 MMT this month, down slightly from 733 MMT last month, global supplies are projected to grow by 2.1 MMT, with higher projected beginning stocks, up 2.3 MMT. The world wheat harvested area was reduced by 169 thousand hectares this month, to 216.4 million hectares. The largest change was a 182 thousand hectare reduction for Ukraine on final government data. But we don’t have a clear number from the USA.

Egypt’s GASC bought an unspecified amount of wheat from global suppliers for shipment from May 20 to June 5. At the beginning of April, they were held French vessel but in a few days after another tender reverse decision. Each year we hear the same story.

Although the US wheat prices have recently become more competitive in the world market, forward prices for delivery through June and August are at a premium compared to other major exporters on a free-on-board basis. The lower-than-expected pace of wheat exports and commitments by Argentina support a reduction in its TY exports by 0.5 MMT this month to reach 13.0 MMT.

StategieGrains lowered its EU 2019/20 soft wheat production projections by 1.3 MMT to 144.8 MMT and also reduced its barley estimate by 800,000 tons. to 61 MMT. As for corn, however, it raised its estimates by 100,000 tons. to 63 MMT.

According to the April report of Riverina analysts, the production of Australian wheat in the 2019/2020 marketing year (under favorable weather conditions) may reach 23.8 million tons, which is 38% more than the previous season. Also, Australian analysts raised production forecasts for the season 2019/2020 for other crops in the country, in particular, barley - to 8.6 million tons (+ 6%) and oats - 1.4 million tons (+ 29%). The gross yield of canola could increase by about 50% to 2.9 million tons.Russian wheat exports are slowing down. USDA’s 37 mmt target was left unchanged in the last WASDE, too optimistic, they are almost 2 mmt lower. Now Russia traded 32.5 MMT of all wheat.

CORN CONAB estimates released this morning put the Brazilian corn crop at 94.008 MMT, up 1.2 MMT from March mainly on a larger second crop. Rosario says Argentinian corn production for this season also seen higher at 48 MMT (47.3 MMT previously). This compares with the latest USDA estimate of 47 MMT vs last year’s drought-stricken crops of 32 MMT.

US corn planting seen 5% complete. Every spring there are always questions about delayed planting resulting in lower corn yields. There were heavy rains last week, especially in western and northern Argentina. The rains slowed the harvest progress in the region, but they are not expected to result in lower yields.

Ukraine exported almost 20 MMT, expectations are from 27 mmt (IGC) to 29 mmt (USDA), local AgMin is in the middle. As large crop from world’s main producers and exporters look to make competition and situation with ethanol prices will unchangeable, corn fundamentals will get weaker. TRADE WAR AFFECTS ADM announced it will seek voluntary early retirements by some North American employees and may eliminate individual jobs as part of a restructuring of specific areas within the company. Their CEO only made $19.6 million last year (+23%) so obviously, not all are being asked to make sacrifices.

China made a shockingly large purchase of the US pork despite hefty trade tariffs, the latest sign African swine fever has made a serious dent in Chinese pork supply. the USDA revealed yesterday morning that China bought 77,732 tons of U.S. pork in the week ended April 4. This is the largest weekly pork sale to China since the early 2013 and will require roughly 3,900 refrigerated containers to make the voyage across the ocean. The USA pork’s largest 1-year shipment to China was 376,137 tons in 2011.