Grain markets are mostly in the green this morning, especially driven by optimism in soybeans that more sensible thoughts are prevailing in Beijing and Washington.
“Forecasting Armageddon has become trendy of late” – Seth Shostak (American astronomer)
Have Soybeans Been Saved from Armageddon?
Grain markets are mostly in the green this morning, driven by optimism in soybeans that more sensible thoughts are prevailing in Beijing and Washington. Wheat prices are impressively green too though as both spring wheat, and winter wheat prices cruise higher on impending drought concerns.
Said dryness is something we discussed for our GrainCents spring wheat readers in the Weekly Digest, emailed out Sunday morning before 8 AM EST. As a refresher, for all 12 crops that our experts cover at GrainCents, every Sunday AM, we recap what’s happened in that market and what we’re watching for going forward. We also recap our cash sales position for the old and new crop.
One thing on the topic this weekend was the trade war discussions between China and the US. Late on Friday, the sorghum market got a boost as China stopped its dumping probe.  Then, on late Sunday morning, China and America called a truce on the trade war talking escalating any more.  As such, yesterday, soybean prices had their strongest day in more than a month, climbing more than a quarter, or 2.7% at the Chicago Board of Trade. 
Has Armageddon been averted?
Soybeans, Spring Wheat Crop Progress Pace Picks Up
Yesterday, while Canada was taking advantage of nice weather on the Victoria Day long weekend Monday, the USDA gave their usual Monday afternoon crop progress update. 
For corn, US farmers have got 81% of the crop planted, matching the five-year average and a 19-point jump week-over-week. Spring wheat seeding in the US has also caught up, with 79% of the crop in the ground now, up 21 points since the previous Sunday and nearly matching the five-year average of 80%.
Barley and oats seeded in the US are also caught up at 81% and 86% respectively. The five-year averages for these two crops at this time of year is 84% and 91% respectively. So, yes, there’s some work left to do, but it’s not all that alarming. Worth mentioning is the first crop rating of the year for US oats at 58% good-to-excellent (G/E). Last year at this time, US oats’ G/E rating was 63%.
Soybeans are getting planted into US fields at a certainly solid pace, with 56% of the American crop now seeded. This is up 21 points week-over-week, and above the five-year average of 44%.
In Canada, fields are also rife with air drills in the West and planters in the East. The next two weeks will be extremely busy in Canadian Prairies as Plant 2018 nears the finish line. Some rains towards the back half of this week (mainly Thursday) could slow things down, but the moisture will be welcomed by areas south of the #1 Trans-Canada Highway in Saskatchewan.
In South America, drier areas of the Brazilian safrinha/second-crop corn belt got some rains over the weekend, but the last two weeks of May are trending pretty dry. Also impacting Brazil is another strike by truckers over diesel prices. As this happens every year, it begs the question about the speed of delivery of grain to port.
In Argentina, the pace of harvest for soybeans and corn is picking back up after rains slowed field activity down in the first half of May. However, the silver lining is that there will be some better soil moisture for the barley and wheat crops to go into. For our GrainCents readers, check out our analysis on how the Argentina barley crop will fare after a drought, and how Argentina’s wheat crop could be a record, despite the dryness.
China & America Call A Trade War Truce
Nearly two months ago, you could say soybeans (and soybean prices) were on the verge of Armageddon as it related to trade with China.
Back in early April when the trade war volleys were just starting, we took a deeper look at the relationship between US soybeans and China in a FarmLead Insights piece. Six and a half weeks ago we told everyone to take a breather and not to panic.
Even as recent as three weeks ago, I was quoted in Bloomberg saying, “There’s a very strong possibility that there’s not going to be any soybean tariffs” (This is what we call a time-stamped position). 
While there’ll be some who say that we’re not out of the woods yet, I’m not going to disagree. But these are an indication that we’re not going to see an about-face from either player.
US Treasury Secretary Steven Muchin on the Sunday political TV show circuit said about China’s purchasing intentions: “There are very hard commitments in agriculture where we expect to see a very big increase, 35-40% increase in agriculture, this year alone.”
Comparably, China’s Vice Premier Liu He was quoted, “The two sides reached a consensus, will not fight a trade war and will stop increasing tariffs on each other.”
Throughout this ordeal, we’ve been on top of all commentary and potential scenarios that could play out for our canola and soybean GrainCents readers.
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