Morning Comments – May 8

Headlines

  • White House Biofuels Meeting

  • Corn plantings surge to 39%

  • Brazil rains to bring relief?

  • Summer Weather Drier Bias

Trump to Outline Bio-fuels Plan

  • President Trump will hold a closed door meeting with senators on Tuesday and outline his plans for bio-fuels policy reform.

  • In previous dialogue the President has put his endorsement behind capping the RIN prices to stave off expenses for oil companies, while at the same time suggesting he would support expanding sales of higher ethanol blends of gasoline, a concession to the corn industry, but a drawback for the oil industry.

Planting Progress

  • US corn at 39%, a solid jump from last week’s 17% and above trade estimates at 37%.

  • There are some problem areas. MN/ND & SD are 6 to 9% planted versus 25/30% normally.

  • Those areas are also expected to see 3 to 4 inches of rain over the next 5 days which could limit planting.

  • For soybeans planting pace hit 15% that was up 5% from last week.

PlantingProgress5618

PlantingProgressSoy

Brazil Rain

  • Rain is starting to appear in the weather models for Brazil which could salvage some of their 2nd season corn crop.

  • The latest GFS run shows rains starting 10 days out and could bring 3 inches of rain. Of course, long range weather models are risky and those forecasts will likely change

US Summer Weather

  • Soil moisture deficits across the Western & Central Plains are likely to see some relief but it may not be enough to alleviate drought concerns especially in the Western Plains.

  • Dryness may become apparent again once July comes with dry conditions forecasted from Western NE to TX.

  • There is some risk of a much drier growing season for the Western Corn Belt

China Soy Imports Slip in April

  • Imports for April were at 6.9 MMT vs 8.09 MMT in the previous April. This was despite good crushing margins of late.

  • Shipments were slowed by changes in an import tax reduction which encouraged Chinese buyers to postpone arrivals to take advantage of a 1% reduction in the VAT tax.

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