1. Soybean Futures Decline on Slack Demand, Dry Argentina Weather

Soybean futures declined amid slack demand for U.S. oilseeds and as dry weather in Argentina allows growers back into fields.

Export sales of soybeans plunged 45% in the week that ended on April 21 to 226,000 metric tons, the Department of Agriculture said in a report on Thursday. That’s also down 36% from the prior four-week average, according to the agency.

Dry weather continues in Argentina, which will allow farmers to collect crops that have been left in fields due to extremely wet conditions the past few weeks. The 10-day dry spell likely will help growers salvage what they can.  

Soybean futures for July delivery fell 2¾¢ to $10.24¾ a bushel overnight on the Chicago Board of Trade. Soy meal futures lost $1.40 to $332 per short ton, while soy oil added 0.19¢ to 33.46¢ a pound.

Corn futures for July delivery gained 1½¢ to $3.92¾ a bushel in Chicago. Prices rose after export sales surged 80% week-over-week to a marketing-year high. Exporters sold 2.16 million metric tons of corn last week, according to the USDA.

Wheat futures for July delivery gained ¾¢ to $4.86¼ a bushel in Chicago. Kansas City wheat added 1½¢ to $4.76 a bushel overnight.

**

2. Grain Production Forecast by Grains Council to Fall, Stocks to Rise 

The International Grains Council, a London-based agency that forecasts global output, trade, consumption, and stockpiles, said yesterday that total grain production in the current marketing year will fall back before rising again next year.

Total world grain output is seen at 2.005 billion metric tons, down 2% from last year, the agency said. Consumption, however, will decline 1%, but adding carry-in stocks, ending inventories will actually rise to 466 million metric tons, the IGC said.

Wheat output is seen at 734 million tons, up from 729 million last year, and consumption is pegged at 719 million tons, up from 717 million. That would leave carryout at 215 million tons. For corn, production is projected at 973 million tons with consumption seen at 975 million, pushing down stockpiles slightly to 206 million.

The IGC mentions the extremely dry weather in Brazil and overly wet weather in Argentina as factors that could limit global grain production, but the agency said it won’t materially affect carryout this year.

“Some uncertainties remain about world total grains (wheat and coarse grains) supply and demand in 2015-2016, largely linked to adverse weather for South American maize,” the IGC said. “Nevertheless, the season is still forecast to end with another significant stocks increase, adding to the safety net against any unforeseen crop problems in 2016-2017.”

For the 2016-2017 marketing year, the IGC said production will total 2.006 billion metric tons, up from an April 1 forecast for 1.997 billion tons. While output rises, consumption is projected lower by 3 million tons to 1.997 billion.

That boosts total global grain carryout at a record 472 million tons, the IGC said.

Wheat production was increased to 717 million tons from 713 million, boosting inventories globally to 218 million tons. The agency’s corn output forecast rose 5 million tons to 998 million, though a corresponding increase in consumption left stockpiles on par with the prior outlook.

Soybean production this year is projected at 318 million metric tons globally, as is consumption. That leaves inventories, including carry-in, unchanged from last year at 38 million tons. Next year, however, output will rise 0.3% to 319 million tons, while consumption jumps 2.2% to 325 million, pushing down stockpiles by 6 million tons to 32 million, IGC data show.

“Reflecting the impact of poor weather in South America, notably in Argentina, the 2015-2016 world soyabean production forecast is cut to 318 million,” the IGC said. “Nevertheless, this is only fractionally short of the previous season’s record. Prospects for crops in 2016-2017 are tentative, but with output projected to be broadly unchanged year-over-year as consumption rises further, global carryovers could contract (to) the smallest in three years.”

Discuss the Crop Progress Report in Marketing Talk.

**

3. Oklahoma Storms May Produce Tornadoes; Western Nebraska Gets Snow

Thunderstorms that could potentially produce tornadoes are rolling through eastern Oklahoma into Arkansas today, while winter storm warnings and winter weather advisories have been issued for western Nebraska.

Thunderstorms are predicted this morning in parts of eastern Oklahoma and western Arkansas that could produce large hail and strong winds, according to the National Weather Service.

“Widespread thunderstorms will occur this morning with a few of the storms becoming severe and producing large hail,” the NWS said in a report Friday morning. “At this time, the warm front is only expected to move into far southeast Oklahoma, so the greatest tornado thread is likely to remain confined to that area.”

Meanwhile in the Western Plains, snow is expected in parts of Wyoming and the Nebraska panhandle through tomorrow, the NWS said.

“Another Pacific storm system will slowly move northeast across the central Rocky Mountains and Plains today and Saturday,” the agency said. “Snow will develop across much of southeast Wyoming and western Nebraska today and tonight.”

Get involved in the discussion in Marketing Talk.