Posted on May, 9, 2024 at 07:17 am
You know there is hope when you start reading stories like the one on my phone tonight. It says that the market lows were in March, and we are in a good rally.
Under a title “Is corn ready for a seasonal pre-summer rally?” Don Dawson from Barchart posits that good news may be ahead after a March when the spec funds took the biggest short positions since 2019.
Interestingly, the day this appeared, grain markets took off after some recent improvement. During the day session May 6, May corn futures gained a dime, May soybeans gained 33 cents and May wheat gained 33 cents, also.
Weather has stopped planting in northeast Ohio since significant rain fell over the weekend. It remains to be seen what happens this week. Most of the Midwest and even areas as far south as Atlanta look ugly on the forecast map right now.
By the time the reader gets this, the severe weather that is forecast over most of the country will have arrived.
Right now, the map shows it missing northeast Ohio, but nothing that happens in northeast Ohio amounts to a hill of, um, corn, although corn has not been planted in hills for a long time.
So, it is possible that we get some clear weather that nobody else sees. Last year, it was the Eastern Corn Belt that was wet early, but we caught up.
This week, the forecast shows that most of the Eastern Corn Belt will get what the rest of the Midwest gets.
In the meantime, it was wet enough that the quick start to planting in the Corn Belt has stalled, and we are now a little behind the average planting pace. The five-year average for the U.S. has 39% of the crop in by now. In fact, we have 36%, which is not much of a lag, but not much may be planted this week, suggesting that next week we could be noticeably behind.
Ohio is actually a winner in the weather sweepstakes so far. The U.S. Department of Agriculture reports that as of the evening of May 5, we have 26% of our corn in.
This is remarkable, since the average planting for this date is just 12%. Also, we planted 20% in one week.
The soybean planting numbers for Ohio are similar to the corn numbers. We planted 13% of the soybeans this week, to get to 20% planted.
The average is 10%, so we are a state that is ahead of normal progress in both corn and soybeans.
It is not just our weather that is moving markets. In Brazil the heavy rains have stalled harvest of soybeans, as fields are flooded.
This will not only stall harvest, but hurt the crop in condition and yield. Then there is Russia, where the rains are hurting the wheat crops.
Looking at numbers, we see that corn has been up most of the last 11 sessions. We are currently trading May corn futures at $4.58 3/4 at midnight going into May 7. We have fallen a long way, $1.17, this spring and winter since the futures high of $5.28 3/4 on Oct. 20. Near the end of February, we traded at $4.11 3/4, and it felt like we could drop into the 3’s. In fact, we are most of 50 cents higher.
The soybeans are a little uglier, even after being up 33 cents May 6. When farmers admit it, they say they have piles of soybeans left unsold.
When the futures were over $14, the hope was for $15. Now we are trading, at midnight going into May 7 again, at $12.43 3/4. We had a high a few minutes ago at $12.55, the highest of this move. Sadly, we fell from $14.21 in the middle of November to $11.40 1/2 Feb. 29. That is most of $3!
If you are one of the producers that still have a lot of soybeans, there is no shame in it.
We do not normally have a high at harvest, and when we do, it is normally because we have a yield that surprises us in early harvest. That was not the case this year; it was just the fact that a lot of factors got the crowd going cheap.
We still have the reality that we are not projecting a big carryout and will likely import beans into Charleston in late summer.
That means that, depending upon our spring, which is starting to look sketchy, we do have legitimate hope for higher prices of soybeans. We just have to get them planted, established and through the critical month of August in good shape.
Chicago May wheat futures have been remarkably volatile recently. The big high was back on Dec. 6 at $6.60 1/2. We had steady declines until a low the end of April at $5.77 3/4.
However, in the last few minutes, we have traded at $6.32 1/2. That is a staggering gain of over 26 cents in the last few hours. I have no idea why we are seeing this spike, but I know it puts us within one day trading of the December high.
It may be time to be grateful for this big bounce and sell any crumbs of wheat remaining. Maybe a new crop sale is appropriate. We have made big gains and need to reward them.
Source: Farm and Dairy