Grain basis levels continued to stagnate this week with both corn and beans each posting less than a 1-cent improvement on the week.
In corn, the biggest movement occurred at the Gulf where export bids were up 3 cents a bushel on nearby basis, but river terminals as a group posted only a 2-cent improvement. Strength was more prominent along the Ohio River areas were many terminals were up a nickel on basis. For the ethanol sector, production levels continue to slip along normal seasonal lines but plants as a group managed a modest 1-cent advance. In eastern Nebraska the two big plants continued to jockey for corn, raising nearby basis by 7 cents a bushel and currently stand at +10K, which exceeded the recent high of +8K in mid-March.
For soybeans, crushing plants were up a modest 1 cent a bushel but several plants in the Western Cornbelt boosted basis by 5 to 10 cents a bushel. In Minnesota, key crushing plants have been steadily ramping up basis with gains of 25 cents a bushel since the first of March. At river terminals, basis levels were up modestly with a 1-cent gain on average, but like corn, bean basis along the Ohio River should greater strengthen the rest of the country.
This week wheat declined the most falling 24 1/4 cents for the week ending Thursday, April 16th. Corn fell 1 3/4 cents while soybeans actually gained 12 1/2 cents this week. Wheat prices declined as a result of crop saving precipitation throughout the plains last weekend. Between .5-1.5 inches of rain fell in the Texas panhandle and western third of Kansas and between .25-.75 inches of rain was seen across most of Iowa, southern Minnesota and northern part of Missouri. Precipitation should expand into the central plains over this weekend bringing an expected .5-2 inches of rain to 80 percent of the wheat belt. The improvement in the weather, coupled with yesterday’s disappointing export sales provides little fundamental support for the grain going into the weekend.
On Monday, the Crop Progress report showed winter wheat conditions slipped to 42 percent rated good to excellent, down 2 percentage points from last week but still well over last year’s 34 percent good to excellent rating. However, conditions are expected to improve next week after a week of meaningful precipitation throughout the drought stricken plains.
Export sales were slow for wheat this week booking 47,900 metric tons of old crop sales, down 85 percent from last week’s sales. This week’s wheat sales were a marketing year low, missing analyst expectations which ranged between 100,000-300,000 metric tons. Old crop corn sales were reported at 588,200 metric tons which was down from 639,000 metric tons reported last week. Corn sales were on the high side of the analyst expectations which ranged from 400,000-600,000 metric tons. China purchased 62,000 metric tons of old crop corn which was unusual activity for the week. Cumulative corn export sales total to 38.6 million metric tons, which is behind last year’s pace but ahead of the seasonally adjusted pace expected to meet USDA expectations. Soybeans beat analyst expectations by booking 312,000 metric tons this week. This week’s soybean sales were a large improvement from last week which saw 176,000 metric tons of cancellations. Notable sales were reported to Germany, Netherlands, unknown destinations and South Korea. Soybeans now totals to 48.5 million metric tons of cumulative export sales compared to an expected pace of 45.1 million metric tons needed to meet the USDA expectations.
NOPA soybean crush came in well over analyst expectations with 162.822 million bushels of soybeans crushed in the month of March. Analyst expectations ranged from 150.5 to 159.5 million bushels with the average analyst guess expecting 155.261 MBU. The latest NOPA report marks the largest March soybean crush on record. Soyoil stocks were reported at 1.420 billion pounds well over analysts’ expectations of 1.383 billion pounds, but below last year’s levels of 2.023 billion pounds.
Ethanol production declined for the second week in a row bringing weekly ethanol production to 924,000 barrels per day. This week’s 12,000 barrel per day decline in ethanol production marks the first time since October that weekly 2014-15 production has fallen below 2013-14 levels. Despite falling below last year’s weekly production level, cumulative ethanol production this year has increased 5.4 percent compared to a USDA expected increase of 1.3 percent. This year’s ethanol stocks increased 162,000 barrels to 20.65 million barrels this week.