The weekly Actual Slaughter report this morning detailed meat production statistics for the first week of May.

The general long term weather narrative for 2024 was one of above normal temperatures for all and below normal moisture during the summer for the Plains and much of the Western Cornbelt. This forecast had been in general agreement among government and private forecasters, with some moderate differences.

Beef export sales of 15,132 tonnes were reported. This was -13% from last year. Beef sales have been on a good run recently except for last week's -26% and this week's -13%. Year to date sales have improved from -13% year/year back in March to now -7% That is on USDA’s whole-year goal of -7%.

Brazil's pricing advantage remains in place. However, it has significantly narrowed.

Weekly export sales today cover Fri 5/3 – Thu 5/9 activity.

We have been expecting to clearly exceed USDA's general crush goal for months. However, this is strongly needed as an offset to poor export sales. Today's disappointing report removes some of the needed help. Lowering our remaining year hopes to now +4% to +7% we are likely down to an overage vs. USDA of +16 to +37 million bushels.

Monthly inflation numbers showed a light decline from March's +3.5% year/year growth rate to +3.4% in April. This was on the trade expectation. This is a light rebuttal to the prior day's report showing a light increase in wholesale level price inflation. Markets now have priced in a 73% chance at a cut in short term interest rates at the September meeting of the Fed's policy making board.

USDA surprised us last week with a 50 million bushel increase for old crop corn for ethanol usage. Now at 5.450 billion bushels, it would be +5.3% from last year's 5.176. There were others in the industry who agreed with this move.

Planting at 49% (54% ave), 1 – 5 day lowered rains slightly, 6 – 10 day raised rains

Nationwide corn planting advanced from 36% complete to now 49% over the past week. That was on the 49% trade expectation. For a second week in a row planting is behind the five year average.

Managed Money buying, shown in five of six weeks have brought their net short position up to -42,360 contracts. This is their most bullish position since November 1, 2022.

Over the past three week's Brazil's four states which produce the bulk of second crop corn have seen a return to dryness.

The May supply/demand report from USDA covers the typical old crop changes noted in prior months. That includes adjustments to the US situation as well as updated South American production numbers. The trade is highly focused on this report given that it includes full new crop balance sheets for both the US and world. For corn and soybeans these new crop estimates held trend yields. That is normally and fully expected. Summer weather will drive this estimate higher or lower.

For disclosure, these basis charts use a simple Central Illinois cash price and nearby futures. In this case, the futures measurement is the expiring May. This can lightly distort these numbers.

Beef export sales of 12,337 tonnes were reported. This was -26% from last year. Beef sales have been on a good run recently. This is just a one week dip. Year to date sales have improved from +13% year/year back in March to now -7% That is currently ahead of USDA’s whole-year goal of -8%.

USDA reported 41,073 tonnes for last week’s wheat export sales activity. The trade estimate was -100,000 to +100,000.

Sales of 889,185 tonnes were reported. For this specific week, this was the best sale in 12 weeks. It continues now three weeks of better than expected sales. The trade estimate was 600,000 – 1,100,000.

Weekly ethanol production has taken a different turn for now four weeks.

Nationwide corn planting advanced from 27% complete to now 36% over the past week. That was under the 39% trade expectation. It was also important was we now moved below the 39% five year average pace.

Corn sees two weeks of buying

For South America our main focus is the developing second crop of corn. From planting through the vegetative growth stage, January through mid-March, rains were -37% from normal. Mid-March to current rains, pollination to early kernel fill, have run -5% from normal. However, it must be noted the past two weeks with that seven-week count were problems at -60% and -71% from normal. The two-week forecast suggests this drier pattern to continue.

In February and early-March Allendale discussed the differentiation in basis between heavy supply years and tight supply years. In heavy supply years basis typically does not continue gains into summer that were noted in the spring. Given a potential sideways basis, and high interest rates this would suggest a potential need to move old crop cash corn and soybeans and conduct paper re-ownership if supportive price views are still held.

The Department of Labor's monthly employment report showed only 175,000 jobs added to non-farm payrolls in April. That was under the 243,000 trade expectation. It is also the lowest job gain in six months.

Weekly Actual Slaughter this morning detailed meat production statistics for the third week of April.

Beef export sales of 22,468 tonnes were reported. This was +12% from last year. Year to date bookings are -6% from last year. That is currently ahead of USDA’s whole-year goal of -8%.