Rains on the plains, briefly

Weekly Highlights of Research & Markets

Rain on the plains, briefly!

Despite much needed recent rains, the condition of winter wheat?in the US continues to remain in poor condition with just 26% of US wheat rated good and excellent, the lowest since 1989. We look at what this means for markets in our?weekly grain report.

Alongside the poor condition of winter wheat, spring wheat planting remains delayed, reaching just 5% complete on a national level and 7 percentage points behind average.

Grain were under pressure this week with?corn rally since March over leaving?speculative investors feeling the pinch, with news of 233Kt of corn being cancelled for delivery to China during the?2022/2023 marketing year knocking 3% off Chicago corn prices on Thursday alone. Managed Money fund position data from last week highlight the still marginally net long position being taken by speculative investors, last week increasing the size of their bullish position from 212Kt to 225Kt.?

Also posing questions for US demand has been ethanol output, which dropped week-to-week and inventories plunged to the lowest level in more than three months. Production of the biofuel fell to an average of 967K barrels a day, down from just over 1M barrels a day the previous week.

This week’s USDA Crop Progress report corn planting continues to progress well, reaching 14% complete and remaining ahead of average.

Soybeans are also off to a good start, reaching 9% complete again ahead of average planting progress. Soybean export data was however more encouraging, as net sales of 311Kt were up noticeably from the previous week and up 38% from the prior 4-week average.?Read more in our weekly oilseed outlook

This week also recorded the release of the Canadian principal field crop area report.

Canadian farmers expect to plant more wheat, canola, corn for grain, barley and soybeans in 2023, while area seeded to oats, lentils and dry peas is anticipated to decrease compared with the previous year. At the national level, farmers anticipate planting 27.0 million acres of wheat in 2023, up 6.2% from the previous year.

Chart of the week:?from our?Grains Report:

Major wheat exporter Stock to Use Ratio