Grain basis was mostly stable this week with both corn and soybeans unchanged for the week across the U.S.
Weather was the big concern this week as Tropical Storm Bill hit Texas and Oklahoma and made its way into the Ohio Valley by late in the week. Wet conditions are leading to not only planting problems, but shipping delays along the IL & MS River as swollen rivers are shutting down some stretches for barge traffic. In FOB market, export premiums were firmer on Thursday because of high water levels on Illinois and Mississippi rivers. FOB soybean basis offers for July were offered at 105 cents over CBOT July on Thursday, up 10c from Wednesday.
End users were mostly quiet this week with little directional movement for either corn or soybean plants. The sharp rally in soybean futures helped increase some farmer selling of old-crop which caused basis levels at soy plants to be weaker as a result. In ethanol, production levels were off this week by 12,000 barrels per day to 980,000 barrels. Basis levels in the Western Cornbelt tended to be weaker for corn end users this week.
Grains found some support this week thanks to heavy moisture that plagued the Southern Plains wheat harvest and kept farmers from planting the last of the soybean crop.
After trading as low as $8.97 at the start of the week, new-crop November futures shot higher reaching $9.45 later in the week before running out of steam. USDA estimated that 67 percent of the crop was in good to excellent condition, below the 69 percent level in the previous week. Also, the pace of plantings has stalled as wet weather continues to hamper the last of the crop, with 87 percent of the crop planted versus a 90 percent 5-year average for this time of year. Early in the week, the NOPA crush estimate for May was released which came in at 148.4 MB, well above analyst estimates of 147.3 MB. However, substantially higher soy oil stocks kept a lid on soybean prices with inventories of soy oil pegged at 1.58 billion pounds versus estimates of 1.40 billion pounds.
In corn, crop conditions also slipped a bit in USDA’s latest report going to 73 percent this week versus 74 percent last week and 76 percent this time last year. Overly wet conditions in the Southern Midwest is causing modest concerns but with ample stocks and sluggish demand it may prove difficult to see a big rally on overly wet conditions at this time of year. Weather forecasting firm Planalytics released their latest US yield forecast which they now peg at 166.2 bushels per acre, up from their previous forecast two weeks ago which came in at 164.1.
For wheat, harvest pace continues to drag in the Southern Plains as rain-soaked fields hamper the progress. The latest crop progress report from USDA shows only 11 percent of the winter wheat crop harvested versus 4 percent last week and a 5-year average of 20 percent. Crop conditions for winter wheat were unchanged from last week at 43 percent good-to-excellent, while spring wheat increased one percent to 70 percent.
Export sales this week were mostly on par with expectations. Wheat sales for the new-crop marketing year came in at 315,700 MT versus trade estimates of 200,000 to 400,000 MT. Old-crop corn totaled 627,000 MT as compared to the trade estimate range of 400,000 to 600,000 and new-crop sales were 200,400 MT versus trade estimates of 50,000 to 200,000 MT. New-crop soybeans were well above expectations with 532,000 MT while analysts expected only 150,000 to 350,000 MT but old-crop sales came in at the low end of expectations at 132,900 MT versus trade estimates of 100,000 to 250,000 MT.