Grains

Grains prices this morning are higher with May corn +1.75 (+0.46%), May soybeans +3.00 (+0.25%), and May wheat +3.25 (+0.70%). Grain prices on Monday closed lower: May corn -3.75 (-0.97%), May soybeans -12.25 (-1.16%), May wheat -10.25 (-2.17%). Bearish factors included (1) the action by Safras to raise its Brazil 2017/18 soybean crop estimate to a record 119.2 MMT from 117.3 MMT last month, (2) reduced Chinese soybean demand after Chinese customs data showed China Mar soybean imports fell -11% y/y to 5.66 MMT, the lowest for the month in 3-years, and (3) forecasts for increased precipitation in the Great Plains, which should improve the condition of the U.S. winter wheat crop.

May soybeans on Friday had posted a 5-week high on bullish factors that included (1) reduced trade tensions between the U.S. and China after Chinese President Xi Jinping said he would open Chinese markets, and (2) positive carry-over from last Tuesday's WASDE report where the USDA unexpectedly cut its U.S. 2017/18 soybean ending stocks estimate to 550 mln bu, less than expectations of an increase to 574 mln bu, and also cut its global 2017/18 soybean ending stocks estimate to 90.8 MMT, less than expectations of 92.9 MMT.

Corn and beans also continue to see support from the Mar 29 USDA Prospective Plantings report, which showed substantially smaller-than-expected 2018 corn and soybean planting (i.e., corn planting at a 3-year low of 88.0 mln acres vs expectations of 89.5 mln acres; soybean planting at 89.0 mln acres vs expectations of 90.9 mln acres).

Monday's USDA Crop Progress report confirmed the poor condition of the U.S. winter wheat crop due to drought. U.S winter wheat in good/excellent condition was at 31% as of Apr 15, up from 30% last week but down sharply from 54% last year. The winter wheat conditions represent the worst spring start since 2002. The NWS reported that the wheat-growing region from Texas to southwest Kansas had the driest Dec-Feb on record. On the negative side, the USDA in last Tuesday's WASDE report raised its U.S. 2017/18 wheat ending stocks estimate to 1.064 bln bu, higher than expectations of 1.039 bln bu, and unexpectedly raised its global 2017/18 wheat ending stocks estimate to a record 271.22 MMT, more than expectations of a cut to 268.4 MMT. Also, Russia recently extended its zero-wheat export tax for an additional 2-years, which should boost Russian wheat exports.