Subsoil Moisture Is Fluid in Indiana and Illinois:
US corn futures regained ground last week, as the USDA reported that the percent of Illinois’ corn crop initially rated as good-to-excellent was at a 30-year low. Reuters is also projecting a greater chance of dry and hot conditions across the eastern US Corn Belt this summer. Regardless, corn remains within its recent trading range. The reality is that the projection of South America’s corn supply has risen and it is still early days for the US. Still, we recommend that traders keep a close eye on subsoil moisture levels in Indiana and Illinois, as more planted corn in these top producing states will reach emergence in the coming week.
Dutch Milk Deliveries Slow:
Global milk prices rebounded in 2016 following steep production cuts by major European exporting countries. In turn, milk production in those EU countries is starting to recover, albeit mostly on a seasonal basis. Yet, the collapse of export milk prices over the prior two years is still fresh in producer’s minds. Given that Netherland’s milk deliveries declined from the prior month in April, we suggest that global dairy producers and distributors watch production reports from Germany and France for similar trends.
China Turns to Cheaper US Pork:
The European Union is one of the largest suppliers of pork to China. A weaker euro and phytosanitary-related restrictions by China on pigs raised in the US, Brazil, and Vietnam have boosted exports from Germany and Spain, the EUs leading pork exporters. However, the tables are turning as US pork has become cheaper. Monthly slaughter in Germany and Spain is declining year-over-year, even as US rates rise. With swine herd expansion in China still restrained by environmental restrictions, we would encourage food companies and soybean companies to monitor US weekly pork export and hog slaughter rates in Gro.