Weekly Market Update 5-18-23

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

1. What sport was discontinued after the 1904 Olympic games but eventually restored for the 2016 Games in Brazil?

2. What was the first children's toy to be advertised on television?

Answers at the bottom.

Market News​

Black Sea grain deal extended. It was announced yesterday that the Black Sea grain deal has been extended for two months. This comes a day before the deal was set to expire, with Russia recently threatening to quit the pact over obstacles to its own grain and fertilizer exports. Turkish President Tayyip Erdogan first announced an agreement, with Russia, Ukraine and the United Nations later confirming. Despite their rhetoric that they might not agree to an extension, Russia’s U.N. Ambassador Vassily Nebenzia said the deal was extended because “we still do not lose hope that the problems that we are raising will be sorted out.” The extension has helped to drive down grain markets the last two days. It’s estimated that 30.3 million tonnes of grain and foodstuffs have been exported from Ukraine under the agreement.

Kansas Wheat Tour pegs the Kansas winter wheat crop at 178 million bushels. The three-day Kansas Wheat Tour wrapped up today. The calculated yield for fields that will be harvested was 30 bushels/acre, with total production at 178 million bushels. This comes in lower than the May 1 NASS estimate at 191 million bushels and would be the smallest crop in over 50 years. No surprise to us, the tour highlighted the effects of the multi-year drought that has robbed this crop's yield potential and will result in many abandoned fields. In Southwest Kansas espeicially, they noted that the wheat looks particularly rough with intense drought, poor stands, short plants, and some freeze damage The tour stopped in 652 fields across Kansas, southern Nebraska and northern Oklahoma.

U.S. corn crop keeps going in at a rapid pace. Corn planting progress increased 16% this week, at 65% planted for the U.S. That is 6% higher than the 5yr average. Kansas was reported at 61%, right on pace with the average and 3% higher than last year. This fast pace can be attributed to favorable weather forecasts that have made for good planting conditions. Milo planting staying in sync with the U.S. 5yr average, reported at 28% planted. The Kansas milo crop is 7% ahead of the 5yr average at 28% planted. Winter wheat conditions remain not so hot at only 29% good-to-excellent – trailing behind the 5yr average of 45%. Kansas saw a 1% decline in conditions week-on-week.

Chinese corn cancellations are reflected in this week's export sales report, adding pressure to the market. Old crop corn had net cancellations of 13.3 million bushels, while new crop corn was reported with net sales of 2.9 million bushels. China cancelled another 272,000 metric tonnes yesterday morning, hammering old crop futures down. This week's export sales report is the worst one for corn in this marketing year. Milo remains quiet with no new crop sales and net old crop cancellations of 0.1 million bushels. Wheat had net cancellations of 1.5 million old crop bushels, while new crop sales were a hefty 12.4 million. Soybeans were the only bright spot, with old crop sales of 0.6 milliion and new crop sales blowing estimates out of the water at 24.4 million bushels. All of these commodities are behind the sales pace needed to hit current USDA estimates, as depicted below.

Weather

Rain and some more rain – late today into early Friday morning expect some moisture, with a cold front coming through bringing widespread showers and thunderstorms to the southwest Kansas. Chances are highest in the south. Weather this week is looking like a wet one with multiple days of thunderstorms forecasted next week and highs up to the 80s, but averaging in the 70s. Wind speeds will be nothing out of the ordinary.

Trivia Answers

1. Golf

2. Mr. Potato Head