Corn closed lower, shrugging off news of a massive Chinese purchase of U.S. corn.

Wheat firmed, buoyed by global export business and declining estimates of the size of the harvest in Russia, projected as the world’s top wheat supplier.

Most-active November soybean futures on the Chicago Board of Trade settled up 2-1/4 cents at $8.77-1/2 per bushel (all figures US$). Strength in soyoil futures and allied Malaysian palm oil futures lent support.

CBOT September wheat ended up two cents at $5.26-3/4 a bushel while December corn finished down 2-3/4 cents at $3.33-3/4 a bushel.

Corn futures fell late in the session despite news that China booked its biggest single-day purchase on record of U.S. corn, buying 1.762 million tonnes of the grain. The deal followed a 1.365 million-tonne corn sale to China announced on Friday.

Market reaction to the latest China sale, confirmed by the U.S. Department of Agriculture, was muted by plentiful old-crop supplies and prospects for big harvests this autumn.

“That’s a pretty good number. But when all is said and done, even if USDA took their export forecast up 100 million bushels, we’d still have a large carryout,” said Terry Reilly, senior analyst with Futures International in Chicago.

In a weekly crop progress report late Monday, USDA rated 69 per cent of the U.S. corn crop as good to excellent, down from 71 per cent last week. It rated 68 per cent of the U.S. soybean crop as good to excellent, also down from 71 per cent previously. Analysts on average had expected smaller declines.

CBOT wheat futures firmed on short-covering and worries about global supplies. Sovecon, a Moscow-based consultancy, cut its forecast for Russia’s 2020 wheat crop to 79.7 million tonnes, from 80.8 million previously, due to low yields in Russia’s southern regions.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Colin Packham in Sydney.

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Chicago wheat and corn fell on the U.S. Department of Agriculture’s assessment of crop conditions, which analysts viewed as bearish, and a favourable weather outlook across the Midwest.

The Chicago Board of Trade’s most-active soybean contract ended down 1-1/2 cents at $8.63-1/4 a bushel, after bottoming out at $8.56-1/2 (all figures US$).

Corn fell 6-1/4 cents to $3.27-1/2 a bushel and wheat slid seven cents to $5.04-1/2 a bushel.

China’s state-owned trader Sinograin bought at least 120,000 tonnes of U.S. soybeans for shipment in December from U.S. Pacific Northwest ports, two U.S. traders familiar with the deals said.

The purchases buoyed the bean market, after crop conditions pressured it lower around midday.

USDA’s weekly crop conditions report, issued after the market close on Monday, rated 75 per cent of the U.S. corn crop as good to excellent, up from 74 per cent last week and aligned with average analyst estimates in a Reuters poll.

For soybeans, USDA rated 72 per cent of the crop as good to excellent, up from 70 per cent last week, and 82 per cent of U.S. spring wheat as good to excellent, above analyst expectations of 80 per cent.

Some seven per cent of U.S. winter wheat was harvested, up from three per cent last week, with 51 per cent of the crop in good-to-excellent condition, slightly better than analyst expectations of 50 per cent.

Weather forecasts across the Midwest indicate heavy rains are coming as tropical depression Cristobal pushes moisture up the Mississippi River Valley, followed by hot, dry weather supporting crop conditions into July, analysts said.

Meanwhile, traders anticipated USDA’s world agricultural supply and demand estimate (WASDE) and crop production reports on Thursday.

“If we can get through that report without any bearish, shocking surprise, I think we will continue to resume the seasonal uptrend higher,” said Ted Seifried, chief ag market strategist at The Zaner Ag Hedge Group. “That report does always have the potential to smash the technical picture.”

— Reporting for Reuters by Christopher Walljasper; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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In the crop progress report released Tuesday from the U.S. Department of Agriculture (USDA), the U.S. corn crop was approximately 88 per cent planted. Of that, 78 per cent was rated good-to-excellent.

“We don’t see any problems with the upcoming corn crop,” said Terry Reilly of Futures International, explaining that prices are expected to remain steady “unless demand picks up from countries like China.”

July corn on Wednesday closed around $3.20 per bushel (all figures US$).

Relations between the U.S. and China remain strained, but “there’s a possibility that China purchases U.S. soybeans for October-January arrival.”

China has been purchasing South American soybeans recently, with Brazil on track to set a record high for soybeans shipped in May. However, the COVID-19 coronavirus has hit the country hard, and may force ports to close.

“We’re keeping an eye on China to see if they come in and buy U.S. soybeans,” Reilly said.

Soybean prices closed around $8.49 per bushel on Wednesday.

Growing conditions have largely co-operated in North America, to the point that winter wheat conditions have improved by two points, to 54 per cent.

“That’s bearish as well,” Reilly said.

— Marlo Glass reports for MarketsFarm from Winnipeg.

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Unifor 594, whose 730-odd members at the CRC were locked out Dec. 5 after serving 48 hours’ strike notice on FCL, aired that warning in a “Dear Farmers” note posted May 13 on its website.

In its note, Unifor recapped its version of talks between the company and union, plus the recommendations from mediators appointed in February by the Saskatchewan government.

After the mediators’ recommendations were released in a report in March, CRC management said it was “unable to accept all aspects of the report’s recommendations in their entirety and will need to make modifications.”

“At that point, it was clear that FCL CEO Scott Banda didn’t want us back at work, even if they got what they wanted,” the union said in its May 13 note.

Unifor said it had been willing to accept the mediators’ recommendations, which it said would mean “collective losses of up to $20 million a year” for its members.

“We are in a position where disrupting the flow of fuel to farmers during seeding is the only option we have to get back to work,” Unifor said in the May 13 note. “We do not want to do that, but our options are limited when the company does not want a deal.

“We do not want the lockout and fuel production issues to stand in the way of farmers getting their seeding done but FCL doesn’t seem to care.”

Rather, the union in its note urged farmers to contact their provincial MLAs and “tell them this dispute must end.”

Specifically, the union said it wants Premier Scott Moe’s Saskatchewan Party government “to follow through and impose the mediators’ recommendations on both parties.”

Early delivery

In response to emailed questions, an FCL representative said Thursday that farmers “should not be worried by Unifor’s threat to disrupt their fuel supply from Co-op.”

FCL said its member Co-ops have “an all-time high inventory of fuel,” and are still supplying farm customers.

The company also said it’s “unaware of any disruption where our farm customers have been unable to receive the fuel they need to complete last year’s harvest or this year’s spring seeding.”

That said, Agricultural Producers Association of Saskatchewan (APAS) noted May 8 in a separate release that it was concerned about access to cardlock stations and rural fuel supplies, “after a recent picket line made it difficult to access a Co-op site in Moose Jaw this week.”

FCL, in a previous statement in late March, said it had already “proactively positioned fuel throughout our extensive fuel distribution network to be as close to our farm customers as possible, whether it be through bulk delivery or at our cardlocks.”

Co-ops have had an “active early delivery program going into spring as well as active usage of our just-in-time delivery through our facilities located across Western Canada,” FCL said Thursday.

The company added it’s tough to estimate how much fuel is still needed on-farm, given the “unique” spring with “both harvesting and seeding occurring.”

Crop progress

Saskatchewan’s agriculture department on Thursday reported spring seeding at 51 per cent complete as of May 18, matching the five-year average for the time of year. Dry conditions “allowed seeding to progress steadily” and for farmers to get into overwintered fields that were “previously too wet to combine.”

Alberta officials reported seeding at about 20.7 per cent complete on average as of May 12, Out of last fall’s unharvested acres across the province, 14 per cent of spring wheat acres, 12 per cent of barley, 29 per cent of oats and 16 per cent of canola acres remained on fields as of the same date.

Manitoba agriculture officials on Tuesday reported seeding at about 42 per cent complete at the end of the second week of May, down from the three-year average of about 55 per cent. Leftover harvest work is ongoing in some regions and the “majority” is done in the province’s southwest.

Still, APAS president Todd Lewis, in the group’s May 8 release, warned that many producers rely on cardlock stations as their primary source of fuel.

“In many cases farmers replenish their fuel supply daily and traveling long distances to avoid picket lines is not an option,” he said.

As for FCL’s outlook on the labour dispute, the company reiterated Thursday it has “made our best and final offer. Despite a major deterioration in market conditions, the offer has not been withdrawn.”

Unifor “claims they don’t have any choice other than to try and disrupt the fuel supply to farmers, but that’s not true,” FCL said. “They have a choice to return to work by accepting our best and final offer, which provides a total compensation package that exceeds the CRC’s refinery competitors.”

“Saskatchewan producers are not in a position to weigh in on or resolve the dispute between union and management,” APAS’s Lewis said of the labour dispute. “But disrupting our essential fuel supply at a critical, time-sensitive period for agriculture is not to anyone’s advantage.”-– Glacier FarmMedia Network

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In contrast, consistent soybean sales since Monday have provided some support to the market.

“This morning we got another sale of soybeans to an unknown destination, that could be China,” Reilly said.

However, the future of the trade deal between the U.S. and China is uncertain, which has also weighed on the market. On Tuesday, President Donald Trump said phase one of the trade deal with China “could happen soon” but, if not, he may raise tariffs “very substantially.”

This week’s crop progress report from the U.S. Department of Agriculture (USDA) showed harvest activity proceeded at a slower rate than the CBOT anticipated.

“Weather will improve next week for the U.S. in general, and it’ll probably significantly improve harvest,” Reilly said.

“Producers will be able to pull more beans and corn out of the ground.”

The crop progress report also reduced the winter wheat quality rating by three points, which “was a surprise as well.” However, he said, “It’s still early.”

Reilly expected the reduced quality rating to be widely ignored, as “wheat is still expected to move into dormancy at a normal pace, and the bulk of development will be when it re-emerges in the spring.”

— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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In particular, Burnett noted, the corn harvest has been further slowed by a propane shortage, which has caused issues for farmers trying to acquire propane for grain dryers. With high moisture levels, farmers want to dry their corn before putting it in the bin.

Due to problems transporting propane, shortages have arisen in some regions in the U.S. — one of them being the northern Plains, according to media reports. Farmers are contending with the demand for home heating, which has put tremendous pressure on suppliers to find enough propane to go around. Some states temporarily lifted transportation restrictions in hopes of speeding up shipments.

As well, snow and cold temperatures have added to the delays. North Dakota was furthest behind of the major corn-growing states. In the weekly crop progress report from the U.S. Department of Agriculture (USDA), North Dakota farmers were only 15 per cent into their corn harvest as of Sunday. While that was a gain of five points from the previous week, it’s a quarter of the pace this time last year and a whopping 61 points behind the five-year average.

Going into November, USDA projected North Dakota farmers to harvest 3.31 million acres of corn and produce close to 12 million tonnes. That is likely to change with future supply and demand reports.

In other states, Wisconsin was 30 per cent through its corn harvest, while Michigan was at 33 and South Dakota at 39. The progress in those three states was at least half or further behind of their respective five-year averages.

The national pace was at 66 per cent complete, a gain of 14 points from last week. However, this time last year, the corn harvest stood at 83 per cent finished, only two behind the average.

Burnett noted U.S. farmers still had about 117 million tonnes to harvest.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Chicago Board of Trade May wheat settled down 5-3/4 cents at $4.59-1/2 per bushel after dipping to a one-week low of $4.56-1/4.

CBOT May corn ended steady at $3.60 a bushel after setting a contract low at $3.55-1/4, and May soybeans finished flat at $8.98-3/4 a bushel.

Wheat slid after the U.S. Department of Agriculture in a monthly report raised its forecast of global 2018-19 wheat ending stocks to 275.61 million tonnes, topping the highest in a range of trade expectations.

Also bearish, the USDA in a weekly crop progress report late Monday rated 60 per cent of the U.S. winter wheat crop in good to excellent condition, up from 56 per cent a week earlier, a sign of improving yield prospects. Analysts on average had expected no change in weekly ratings.

“If (U.S. winter wheat) ratings continue to improve, we could see July Chicago wheat trade back to $4.40, easily,” said Terry Reilly, senior analyst with Futures International. The July contract settled Tuesday at $4.64.

CBOT corn futures pared losses to end steady after the front three contracts hit contract lows. The market fell after USDA in its monthly supply/demand report raised its forecast of domestic corn stocks at the end of the 2018-19 marketing year to 2.035 billion bushels. The figure was up from 1.835 billion in March and above an average of trade estimates for 1.991 billion.

But corn futures soon erased declines and even turned higher at times as traders covered short positions.

“We knew U.S. corn stocks were going to be higher after the quarterly stocks report … Now that the (monthly) report is out of the way, some people are willing to buy the market because, let’s face it, we’re having less-than-optimal planting conditions out there,” said Jack Scoville, analyst with the Price Group.

A spring snowstorm was forecast to cross parts of Nebraska, South Dakota, Minnesota and Wisconsin starting Wednesday, potentially dumping eight to 16 inches of snow, the Commodity Weather Group said in a client note. Farmers in those areas are trying to prepare fields for the seeding of spring crops including corn.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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Corn and wheat futures also settled in positive territory, recovering early losses after holding support at key technical points. But bearish reports from the field kept the gains in check.

The soybean harvest flooded country elevators and processors with supplies which pressured bids on the cash market and cast a negative tone on future prices.

“Soybeans caught downward pressure in overnight trading as the pace of the U.S. harvest nearly caught up to the five-year average,” Farm Futures analyst Bryce Knorr said in a note to clients.

The U.S. soybean harvest was 70 per cent complete, ahead of analysts’ forecast of 64 per cent, the U.S. Agriculture Department said in its weekly crop progress and conditions report. That leaves farmers only three percentage points behind their five-year average.

Chicago Board of Trade November soybean futures ended down 5-1/4 cents at $9.75-1/2 a bushel (all figures US$).

The corn harvest, at 38 per cent complete, remained 21 percentage points behind the typical pace. Analysts had been expecting the corn harvest to be 44 per cent complete.

But USDA assessed 66 per cent of the U.S. corn crop as being in good to excellent condition, which compared with analysts’ forecast of 65 per cent.

“Part of the reason for the slow harvest is that the yields are better than expected,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital.

CBOT December corn ended up 1-1/2 cents at $3.52-3/4 a bushel. Support was noted at the contract’s 10-day moving average.

USDA said 75 per cent of U.S. winter wheat was planted, ahead of analysts’ forecast of 73 per cent.

“U.S. wheat planting is also going well while large wheat export supplies from the Black Sea region continue to be a burden,” said Graydon Chong, senior commodity analyst with Rabobank. “Some background support is coming from fears of a large reduction in the Australian crop after poor weather.”

CBOT December soft red winter wheat was up 1-1/4 cents at $4.38 a bushel. Support was noted at the contract’s five-day moving average.

— Mark Weinraub is a Reuters correspondent covering grain markets from Chicago; additional reporting by Michael Hogan in Hamburg and Colin Packham in Sydney.

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