Corn basis was mostly unchanged for the week with US average basis levels stagnate. However, a late week increase in futures prices but cash corn basis levels on the defensive. For soybeans, basis levels posted a modest 1-cent a bushel advance as nearby futures prices gave up 18 cents on the week.
In corn, Thursday’s 6-cent advance was met with relatively sharp drops in basis by corn merchants. Even Friday morning there was clear follow through with major plants in MN & NE posting lower basis compared to Thursday’s quotes. On average, ethanol buyers were off 1 cent a bushel but in the Western Cornbelt basis levels showed more weakness with some plants giving up 5 cents or more on the week. For export sensitive areas, basis levels were weaker thanks to a 2 cent drop at the Gulf. Upstream river terminals came under more pressure giving up 3 cents a bushel on average for the week.
For soybeans, USDA’s supply and demand report early in the week pointed to ample supplies of stocks in the coming growing season, and with near-term export business winding down, there seems like little incentive for end-users to aggressively bid higher for beans. At the Gulf, basis levels were up 3 cents a bushel, but river terminals on average only showed a 1-cent gain. For soy plants, there was only modest changes for the week with a 1-cent improvement on average. However, mid-week one Indiana plant was aggressively bidding up beans, but it was short-lived as pipeline supplies quickly filled the needs.
This week the grains were mixed with corn trading 6 1/2 cents higher, wheat 41 1/2 cents higher as a result of a sharp short covering rally on Thursday and soybeans fell 18 cents. Friday morning the NOPA crush figures will be released at 11 AM CST with the average analyst expecting to see April crush reach 147.827 million bushels, up from 132.667 million bushels last year. The average analyst guess pegs soyoil stocks at 1.461 billion pounds.
Crop progress was reported on Monday and showed strong planting progress for the grains this week and improved winter wheat conditions. Corn plantings jumped 20 percent last week reaching 75 percent planted. This year’s planting pace is well ahead of the four year average of 57 percent complete. Soybean planting pace is also ahead of the four year average with 31 percent planted compared to 20 percent usually. Spring wheat is now 87 percent planted, up from 75 percent planted last week and now 36 percentage points ahead of the four year average.
Yesterday, the USDA released its May WASDE report which had little effect on corn and wheat, but sent soybeans into a tailspin by the end of the day. Old crop soybean demand was revised higher by 20 million bushels to 350 million bushels after crushing and exports were increased by 10 million bushels each. The bullish old crop surprise was overshadowed by increased South American production and ominous new crop ending stock projections of 500 million bushels. The average trade guess expected new crop carryout to total 443 million bushels.
Old crop corn ending stocks increased 23 million bushels to 1.851 billion bushels which was shy of expectations. A 48 million bushel decline in feed and residual use was partially offset by a 25 million bushel increase in exports. New crop ending stocks were mostly on par with expectations with 15/16 carryout forecast at 1.746 billion bushels with a new crop yield pegged at 166.8 bushels per acre.
Ending stocks for old crop wheat were increased by 25 million bushels to 709 million bushels after the USDA bumped imports by 5 million bushels and slashed exports by 20 million bushels. Export pace has been softening recently with the last couple weekly reports showing cancellations totaling to 597,000 metric tons. New crop wheat ending stocks were forecast at 793 million bushels which was above expectations of 750 million bushels.
Global carryout for the 2015/16 marketing year looks to be higher than the expectations for soybeans and wheat. Global wheat ending stocks were pegged at 203.32 MMT up from 200.97 MMT in 14/15 and above the average trade guess of 193.53 MMT. Global corn ending stocks are expected to hold mostly steady at 191.94 MMT compared to old crop carryout of 192.5 MMT. Global soybean carryout is expected to rise significantly to 96.22 MMT, above expectations of 95.17MMT and last years ending stocks of 85.54 MMT.
Export sales were relatively unimpressive on Thursday with old crop corn sales the most disappointing. Old crop corn sales were reported at 370,000 metric tons, down 56 percent from last week and missing expectations which ranged from 600,000-800,000 metric tons. Old crop wheat sales reported 115,000 metric tons which was on the high side of expectations which ranged from cancellations to sales of 100,000 metric tons. This week’s wheat sales were a significant improvement over last week’s 148,000 metric ton cancellations. Soybeans reported sales of 136,000 metric tons which was down 60 percent from the previous week and on the low end of expectations.