Grain basis levels were modestly higher this week with both corn and soybeans posting an anemic 1-cent a bushel gain on average across the US this week.
In corn, it was a quiet week for export basis with the Gulf basis unchanged. River terminals found only modest strength with barge rates slipping a bit from the previous week. For ethanol, production continues to be robust which is keeping plant bids for corn relatively strong. Although basis levels were up on average only about a penny for the week, some plants in IA and MN were posting 5-cent advances for basis.
For soybeans, Gulf bids were modestly weaker with a one-cent decline, but river terminals found added strength, posting a nearly 3-cent gain on the week. Export sales for soybeans continue to be positive and while not as big as early season sales, are significant enough to keep buyers aggressively trying to get beans out of farmer hands. For crushers, it was a pretty quiet week overall, but there was some modest strength in the Eastern Cornbelt with some plants up 5 to 7 cents on the week.
The grains were mostly quiet for the week ending Thursday, April 23rd with corn falling 5 1/2 cents, soybeans rising 12 1/4 cents and wheat jumping 3 1/4 cents. Crop conditions on Monday showed that winter wheat ratings were unchanged. Spring wheat is now 36 percent planted compared to only 17 percent a week ago and a five year average of 19 percent. Corn planting seemed to disappoint analysts by showing only 9 percent had been planted, up from 2 percent last week and behind the five year average of 13 percent.
The avian flu has also been a concern for corn and wheat traders this week after Wisconsin governor declaring a state of emergency over the recent outbreaks. The governor authorized the National Guard to help contain the flu and clean infected sites. The largest of the recent bird flu instance occurred this week at a farm near Harris, Iowa. The bird flu was detected in a flock of 3.8 million hens at an egg laying facility. Following the release of this news, Mexico halted all imports of U.S live birds and eggs from the state of Iowa. Traders are concerned that these incidents will impact the export market and effect grain feed use. Since the beginning of the year the bird flu has been detected in Arkansas, Idaho, Kansas, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin.
Export sales were very positive this week with corn reporting 867,000 metric tons of sales, an increase of 48 percent from the previous week and well above the 400,000-600,000 metric tons expected by analysts. Corn has booked cumulative sales of 39.5 million metric tons which is behind last year’s pace, but still well ahead of the 37.9 million metric tons needed at this time to meet current USDA expectations. Soybeans booked 102,100 metric tons of export sales which was bullish for the grain. Continued export sales for soybeans show that despite the record harvest in Brazil, demand for U.S. soybeans remains strong. Cumulative soybean sales now total to 48.6 million metric tons, well over last year’s pace and above the pace needed to meet USDA expectations. Wheat sales showed some strength this week booking 397,500 metric tons of sales, above the 0-100,000 metric tons expected by the market and well over the 47,000 reported last week.
On Thursday, the trucker strike in Brazil ignited again after negotiations failed to address the trucker’s main concerns. By Thursday, local authorities counted 17 strike locations. Although it is improbable that the most recent trucker strike will escalate to the level it reached over the last couple months, it is still an issue that deserves close attention in the coming week. The flare up of the trucker strike has some traders worried that a significant disruption in Brazil logistics could result in export sales being pushed onto U.S. books.
The Ethanol production reported a week over week increase of 6,000 barrels per day bringing the total to 930,000 barrels per day. This week ethanol stocks increased 697,000 BPD to 21.34 million BPD.
The International Grains Council raised its global corn stocks forecast by 10 MMT to 951 MMT on Thursday. The council also cut wheat production for the 15/16 crop by 4 million metric ton to 705 million metric tons. Also on Thursday the Argentinian Agricultural Ministry’s announced they expect a record harvest of 59 million metric tons of soybeans harvested this season, up from their previous forecast of 58 million metric tons. The USDA currently pegs Argentina production at 57 MMT, up from 56 MMT in March.