Yesterday morning, the USDA announced the sale of 136,000 mts of old crop corn to unknown. Thursday's USDA’s bean acres of 90.995 million project a US bean carryout over 400 million with a trend line yield of 51.5 bpa. Old crop bean carryout is projected be 285 million bushels. Corn acres of 89.490 million with a trend line yield of 181.0 bpa projects the new crop corn carryout would be the same as the old crop. A minor problem with math is we have never had a corn crop yield more than 177 bpa. The corn/bean ratio (how many bushels of corn does it take to equal the value of one bushel of soybeans) took a dive the past two days, falling to 2.04:1; it was 2.2:1 on Wednesday. A ratio of 2.4:1 means it is a tossup to plant corn or beans from a profit standpoint.
Secretary Vilsac is not at all pleased that the USDA gives "big bucks" to farmers with “subsidies and handouts” and farmers do not fill out surveys. Therefore, the Planting Intentions survey will be done again in April to get more realistic numbers.What we have here is a failure to communicate.
Editorial comment: It is more USDA's failure to be honest about the numbers than farmers not filling out surveys.
Purchasing Managers Index (PMI) is survey of medium to large manufacturing companies’ purchasing managers. The survey is simply, “Will your company be buying more or less inputs this coming month than last month?”
The PMI has become a respected indicator of the short term business outlooks of countries around the world. If the PMI is over 50%, There will be expansion. A half percent change in the PMI is considered a significant change.
China’s manufacturing PMI fell from 50.4% for March to 48.1% for April, the lowest level and biggest drop since Feb 2020. Not good for China’s import outlook, but they still have to eat.
Senators Rubio and Lummis have formally requested that some acres be released from the Conservation Reserve Program without penalty in response to the Russian invasion of Ukraine.
Brazil is the world’s #2 corn exporter. Brazil had a poor corn crop last year. Brazil’s corn exports totaled 14,278 mt in March vs 292,013 mt in March 2021. That is what will happen to Brazil’s soybean exports in August and September.
Rain in the Southern Plains has been spotty. Some areas of NE Kansas have received 150% of normal rainfall, while Western Kansas is well below average.
Ukraine's military destroyed two fuel dumps across their border into Russia.
Russia raised their wheat export tax from $87/mt to $96.10 for April 6-12.
This morning: Crude oil settled at $99.42, down $0.86 The dollar index settled at 98.57, up 0.26 July palm oil settled at 5,360 MYR, down 167. The contract high was made March, 9th at 6,531 MYR. Palm oil owns 36% and soybean oil owns 28% world market share. December cotton settled at $110.68, down $0.60 per cwt. The contract high was made March, 28th at $114.15 per cwt. Cotton competes with soybeans and corn for acres. July natural gas settled at $5.857, up 0.101. The contract high was made March, 31th at $5.943. Natural gas is the primary cost to manufacture nitrogen fertilizer. July ULSD settled at $3.1256 per gallon, up 0.0165. The contract high was made March, 9th at $3.7675. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
The Western Corn Belt has 5 less rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 2 more rain days than yesterday.