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Update for May 13th, 2022

USDA May Worksheet and Updates on Ukraine & Brazil

Last week planting progress remained slow and well behind normal pace. The USDA estimated that as of May 8th, 22% of the U.S. corn crop had been planted vs 14% the week prior and the average of 50%. This remains the slowest planting progress since 2013. The following list includes the corn planting progress vs average by state: • IA 14% vs. 63% avg • IL 15% vs. 58% avg • IN 11% vs. 58% avg • OH 11% vs. 39% avg • MN 9% vs. 48% avg • SD 11% vs. 32% avg • ND 1% vs. 18% avg • NE 39% vs. 57% avg • KS 46% vs. 50% avg

Soybean planting is also slower than normal with 12% planted as of last Sunday vs the average of 24%. There should be a sizable increase in both corn and soybean planting progress in the next USDA progress report.

The USDA released the May report yesterday and surprised the market with a projected below-trend U.S. corn yield of 177.0 bushels per acre for the 2022 crop in the initial report. Typically, the USDA begins the crop season with trend line yields which would have been closer to 181 bushels per acre. The report actually read, “The yield projection is based on a weather-adjusted trend, estimated using the 1988-2021 time period, assuming normal summer growing season weather but lowered to reflect the slow pace of planting progress as of early May.” In a controversial move the USDA reports they expect corn demand to fall in 22/23 by 370 million bushels from that of 21/22. In addition, a sharp reduction was made to global import and usage even though it is very rare for global demand to decrease. This has sparked speculation that the USDA may be “sandbagging” the demand numbers to keep a lid on the appearance of a tight balance sheet.

Soybean report data shows the USDA expects we will produce more soybeans in the U.S. during the 2022 growing season than ever before. They look for a total soy production of 4.64 billion bushels this year which is 205 million more than we raised in 2021. In return though they raised export numbers and the soybean crush total.

CONAB has raised their estimated production totals for both corn and soybeans. They report that 95% of Brazil’s soybean crop has been harvested and have projected soy production of 123.83 million tons. This is a 1.1% increase from April estimates but 10.4% lower than the total 2021 production. This is due to the drought that began late last year and early this year in several key production regions. Corn production is forecast at 116.1 million tons of which 89.299 million ton is from the Safrinha crop-the largest of the two corn crops. CONAB has raised the expected corn exports to 38 million tons but left the forecasted soybean exports unchanged.

Brazil’s Safrinha corn crop may be in jeopardy as the Brazilian National Weather Service (Inmet) has issued a frost and freeze warning specifically for the southern region of the country where much of the 2nd season corn crop is raised. The cold air is expected to arrive the 15th or 16th with the coldest temps forecast for May 19. Crop consultant Dr. Michael Cordonnier warns that this is extremely early in Brazil’s “winter season” for temps this low and is likely the result of the La Niña weather pattern that is still present in the Pacific Ocean. The frost/freeze is forecast for the key Safrinha growing states of Parana, Mato Grosso do Sul, southern Sao Paulo and Paraguay.

Ukraine’s crop production plays a vital role in feeding the world. It’s estimated that in a typical year Ukraine feeds 400 million people around the globe. Projections for production and exports have been drastically cut in terms of what estimates were “pre-invasion” and give a realistic gauge of some of the impacts the Russian invasion is having:

• Corn Production down -54% vs pre-invasion

• Corn Exports down -73% vs pre-invasion

• Wheat Production down -35% vs pre-invasion

• Wheat Exports down -58% vs pre-invasion

Ukrainian president Zelensky has asked global leaders to assist in clearing the countries ports from the Russian blockade. He told the international community, “For the first time in decades and decades, in Odessa there is no regular movement of the merchant fleet, there is no routine port work. This has probably never happened in Odessa since WWII…And it is a blow not only to Ukraine. Without our agricultural exports, dozens of countries in different parts of the world already on the brink of food shortages. And over time, the situation can become, frankly frightening.”

The La Niña weather pattern now has a 58% of lasting through the summer according to a U.S. government forecaster. The Japanese weather bureau has given the weather pattern a 70% chance of lasting through the summer and even see chances that it could remain in place through the fall. (Reuters) This is another year of the “haves” and “have nots” where precipitation is concerned. Key growing regions of Minnesota have been slammed with more than 3 inches of rainfall over the past 3 days as have eastern parts of South and North Dakota. So, while these areas are dealing with an over-abundance of precipitation some parts of the country remain stuck in the ongoing drought. Currently, estimates indicate that 69% of U.S. winter wheat is in areas with drought conditions.

We are finally starting to see a sustained shift in the weather. April was the coldest in 22 years and May is on track to the warmest in 4 years and the 6th warmest in 37 years if trends hold.

The map above shows the expected rainfall totals from today through next Friday.

The outlook for the 6-10-day and 8–14-day outlooks from the Climate Prediction Center for temps and precipitation are illustrated in the following 4 maps.

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