By: Dan Hueber –
Another dreary and moist day here in the upper Midwest and it would appear there is more of the same on tap, literally. While the plains states could begin to dry out, the forecast for the Midwest for the next couple weeks remains wet and could even include a bit more snow and frosty temperatures. So much for an early planting season to the north. The first nationwide progress reports will begin next week but individual states have been providing updates. Texas is reportedly 56% complete with corn versus an average of 43%, Arkansas at 30% which is right on target, Georgia at 49% compared with a normal 42% and Louisiana at 90% versus the average of 70%.
A bit further south from there, and by that I mean around another 4 to 5,000 miles, harvest in South American continues to chug ahead with yields continuing to impress. AgRural estimates that the Brazilian bean pace has reached 74% complete which is actually 2% behind the same time last year but remains 4% ahead of average. The weather forecast appears to look favorable to rapidly finish up this sizable crop. Dr. Cordonnier has now increased his yield estimate to 109 MMT, moving him 1 MMT ahead of the last USDA estimate. Wet weather does appear to be hampering the bean harvest in Argentina though and the Buenos Aires Grain Exchange places the harvest at just 2% complete, versus 7.6% last year and an average of 4.5%. The weather for in the nation is forecast to remain on the moist side so the harvest pace could struggle for now.
Grain markets did not hold a substantial portion of the intraday gains yesterday and beans struggled even more so but bulls are trying to regroup for another attack this morning. We appear to be finding a little support from the outside as metals are stronger as are the energy markets. Note that after finding support over the past few weeks against the 55-week moving average, which just so happens has supported crude since last summer, this market has pushed back above the $50 zone and is giving preliminary signs that the correction may be complete. If we see WTI begin closing back above $52 it could be the trigger to bring investment dollars back in the commodity direction particularly if we continue to see equities struggle in the weeks ahead.
