The bullish grain market has expanded into the kind of exciting week or two that will be remembered for a long time.
Corn markets made big gains, but soybeans returned to lead the market for the first time in a while. May soybean futures gained $1.061⁄2 for the week, and the November was up 671⁄2 cents. And, that was just last week.
The trend continued April 26, with new highs. Again April 27, we had new contract highs in corn, soybeans and wheat. Overnight, the grains actually gapped higher and traded to the contract limits.
May corn traded $7.201⁄2 and December traded at $5.93. May soybean futures touched $16.083⁄4, and the November touched $13.843⁄4. Those gains did not hold, however.
On the morning of April 27, May corn futures were at $6.96, up 151⁄2 cents. The December was down two and a half at $5.653⁄4. May soybean futures were at $15.771⁄4, up eight and a quarter. The November was off 23⁄4 cents at $13.591⁄4.
Planting progress
Talk has been that the planting progress would continue to lag because of dry weather and cold conditions that had farmers shy about planting. The idea was that this would promote higher prices. Well, we got the higher prices in spite of the fact that farmers mostly caught up the planting pace.
Ohio has planted 8% of the corn, up from 4% last week. Normal is 7%. The nation is at 17% for the corn planting, up from 8% last week. Normal is 17%. The Ohio soybean planting is at 8%. That is a 3% gain on the week, but 6% ahead of normal.
The U.S. soybean planting is also ahead of normal. We are now at 8%, up from just 3% last week. The normal is 5%. There is speculation that we are planting soybeans ahead of corn is some areas in an attempt to capitalize on late summer prices.
We anticipate higher prices as a result of running out of beans to crush and needing to import them from Brazil. Farmers may hope to harvest in late summer and capture the old crop price with new crop beans. If we warm up, that may work. If we stay cold, we may actually lose some early beans.
Fluctuating prices
Let’s look at the amazing ranges of prices over the last month. May corn had a range of $1.863⁄4 from the recent low of $5.333⁄4 March 30 to the overnight high April 27. The December corn futures had a $1.451⁄2 range in the same dates.
May soybean futures gained $2.441⁄2 from the low of March 30 to the overnight high April 27, which was the highest price since July of 2013. The November contract gained $2.003⁄4 from March 31 until the morning’s high on April 27.
Any way you look at it these are gains that are historic and memorable. They are also gains that should be rewarded. It is notable that the highs in early trading during the overnight did not hold on the morning of April 27. We were trading way below the highs, which would indicate that we need new news to keep the rally going.
Wheat
Notable after months as an “also ran” commodity, wheat futures have now traded notable new contract highs. Wheat production in this country is suspect, with the dry weather in the west and the cold temperatures returning to the Southern Plains.
We still question the crop after the freezes of March, and now we have cold weather with the wheat in a more advanced stage of growth. Remember, wheat gets harvested the first week of May in Dalhart, Texas.
It must be noted that we are trading wheat on our interests, as the world as a whole has good supplies.
May Chicago wheat futures have seen a range of nearly $1.80 since the March 31 low of $5.931⁄4. Early April 27 we made a high of $7.73, although we were trading at $7.471⁄2 later that morning.
So, last week we had big highs April 22, and I told anyone who would listen that we needed to make some catch-up sales if they did not have some new crop corn and beans sold. After this week’s gains, that advice is becoming critical.
We are making multi-year highs, and we must not try to pick the high at this point and risk lower prices. Yes, there are all the weather reasons ahead of us why we could go higher. We have not even got the crop planted.
However, high prices come on the fear of shortages, and we are already there.
