By Doug Tenney, Leist Mercantile
Ending stocks were bigger than expected all across the board for both old and new.
It’s been a crazy week for grain prices, unfortunately a down week. Producers have been active with field preparations and most of all, planting finally taking place. However, at least for Ohio, it has not been a full week of planting for everyone.
Old crop corn ending stocks were 2.095 billion bushels, last month 2.035 billion bushels. Soybean ending stocks were 995 million bushels, last month 895 million bushels. Wheat ending stocks were 1.127 billion bushels, last month 1.087 billion bushels. Looking ahead to 2019 crops, corn ending stocks were 2.485 billion bushels, soybeans 970 million bushels, with wheat at 1.141 billion bushels.
This report today was a supply and demand report which also includes the first report for 2019 crops. In a first ever, world grain tables without China are also detailed. This change was announced months ago.
Prior to the report, corn was up 1 cent, soybeans down 2 cents, and wheat up 2 cents. Following the report corn was down 6 cents, soybeans down 5 cents, and wheat down 5 cents.
Without doubt, the biggest news this week has been the President Trump tweet on Sunday announcing China was not standing by previously agreed to commitments produced with the month’s long trade talks. Grain prices for Sunday night had been called steady to slightly higher prior to this tweet. Instead, corn, soybeans, and wheat were all lower on the Monday close.
Further details have followed this week which indicate that a diplomatic cable from Beijing arrived in Washington, D.C. late last Friday night. It included a multitude of edits to the nearly 150-page draft agreement. In addition, the document was riddled with reversals from China on previously agreed to wording in the seven chapters of the draft trade document. These changes prompted the action taken by President Trump.
Mid-morning today, July CBOT corn was $3.53 ½, down from last Friday’s close of $3.70 ¾. July CBOT soybeans were $8.10 and compares to last Friday at $8.42 ¼. July CBOT wheat was $4.31, last Friday it closed at $4.38. The uncertain trade talks, as well as weather permitting more active fieldwork next week, along with disappointing U.S. grain export sales from Thursday, all contributed to the price declines on Thursday.
On May 10 at 12:01 am the U.S. put a 25% tariff on $200 billion of China goods imported into the U.S. The previous tariff had been 10%. This follows what President Trump said he would do earlier in the week if there was not a U.S./China trade agreement taking place. He was concerned progress was taking place at too slow of a pace. The Chinese trade delegation did indeed come to the U.S. this week as scheduled for further trade talks with discussions taking place for a shorter period than earlier indicated.
It is interesting to note that while the additional tariffs took place this morning, there was a dinner Thursday night between both sides. In addition, trade talks are continuing into today. It would seem encouraging that China did not just cancel their trip and say, “See you later.” Earlier rhetoric this week from China indicated that if the current trade talks failed, they would not be at the table until after the 2020 U.S. presidential election. China also mid-week asked for the U.S. to meet them halfway and denied backtracking from the previous draft agreements. The saga continues.
The U.S. Midwest weather forecast has a slightly drier pattern for next week compared to just a few days ago. Good soaking rains are expected to return to the western Midwest near the end of next week. Unless there is a huge surprise in the corn planting progress this week, the Monday, May 13 crop progress report could show well less than 50% of the U.S. corn has been planted. U.S. corn planting progress as of the May 6 weekly report was 23% while the 5-year average was 46%. Soybeans planted were just 6% with the 5-year average at 14%.