The weather worries that kept the grain market on edge for the past few weeks appear to be fading.
Corn planting progress has improved and dry areas of Europe and Australia have received rain.
American corn still dominates the market.
Despite showers in the U.S. Midwest, farmers were able to seed 53 percent of the corn crop by May 6, up 30 percent from the week before and better than the analysts’ average expectation of just shy of 50 percent. The five year average is 64 percent.
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The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
That is a testament to the ability of today’s huge seeding equipment to cover acres quickly.
Rain was again in the forecast, but if they can get another 30 percent in by May 13, they will be only slightly behind last year and ahead of the 2001-05 average of 77 percent.
This should calm worries that if seeding dragged into the second half of May it would hurt yields because the crop would flower in the heat of July.
The wheat market production outlook also improved.
Frost damage in the U.S. winter wheat crop turned out not as widespread as initially thought and the areas that escaped damage appear to have bumper yield prospects thanks to a wet spring.
The U.S. Wheat Quality Council’s annual tour last week projected 2007 Kansas wheat production at 10.7 million tonnes, up from last year’s tour estimate of 8.7 million tonnes and actual 2006 production of 7.9 million tonnes.
And consulting firm Informa Economics estimated the 2007 U.S. all-winter wheat crop at 46.66 million tonnes, up from 2006 production of 35.33 million and 40.80 million in 2005.
The first U.S. Department of Agriculture wheat production forecast is to be issued May 11.
Seeding of the U.S. spring wheat crop is ahead of normal with 68 percent in the ground as of May 6 compared to the five-year average of 62 percent.
Growing conditions outside the United States are also improving.
Dry regions of Europe received rain in the last week and more was forecast for this week.
Parts of Australia’s grain region also enjoyed rain last week, just in time to get seeding underway. More rain was forecast for this week.
Seeding in Canada is proceeding in most areas and soil moisture is generally good.
These factors are weighing down the grain market as is record high ocean freight costs. Importers are reluctant to buy while shipping costs are so strong.
The grain market will likely trend sideways to lower for the next few weeks until the next weather worry develops. That might be an intensifying La Nina trend in the Pacific Ocean, which is correlated with a hot, dry summer in the Midwest.
