This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

Wheat was the clear leader to the upside last week. There are production issues popping up all over the world which have the spec funds rethinking their short positions. The rapid decline of crop conditions in the US Plains is just one of several in the world. The systems that moved across the US last week and into the weekend left some pretty big holes in areas that desperately needed the moisture. The rains have missed up to 40% of the Hard Red Winter wheat in Western Kansas, the Oklahoma panhandle and West Texas. Condition ratings are also deteriorating in Southern Russia, Eastern Ukraine and parts of Western and Southern Australia. However, crop ratings for Soft Red Winter wheat are the highest in recent memory and that is the contract of wheat that trades in Chicago. So while the funds are lightening up on their short positions in Chicago wheat, we are going to see a divergence of the US wheat contracts. On monday, Chicago wheat was down 13 cents while Kansas City wheat (hard red winter) was only down 2 and Minneapolis wheat (hard red spring) was up 4. Other than wheat, there has still not been much of a story in the rest of the row crops. Cotton has found some support and is bouncing off the lows as the market finally seems interested in putting in a weather premium and on the back of great export numbers last week. Bean harvest is all but complete in Brazil and slow to get started in Argentina. Exports were strong last week on corn but ethanol grind was disappointing for the second week. 

Much of the Midwest got a big drink of water which will slow planting progress but we had a decent jump on it. USDA’s progress update released on monday showed corn planting at 27% complete as of sunday which was right at the expectations. That compares to 12% last week, 23% last year and 22% average. Soybean planting was estimated at 18% complete vs 17% expected. That compares to 8% last week, 16% last year and 10% average. Bean planting is well ahead of average pace. Cotton planting was estimated at 15% complete vs 11% last week, 14% last year and 14% average. 

The US wheat crop was rated at 49% good or excellent compared to 50% last week and only 28% last year. This is not a big change for the country overall but we saw significant further declines in Oklahoma (-3), Kansas (-5), Nebraska (-5) and Colorado (-5). Those are the states that were missed by the most recent rain event and the declines that have been catching the market’s attention. 

The next important news we will get will be on USDA’s May update that comes out May 10th at noon. That will be our first look at the new crop balance sheets. The market will continue to watch weather developments.