Summer is officially here. With it this year, came the first warm temperatures and the first dry stretch that allowed crop growth to surge. What has not surged is crop prices.
Yes, we ran soybeans up more than $2 the last three months, but the last few days have brought an end to that price trend.
Now we are taking stock of the prospective crop size and usage to try to get a feel for summer prices.
The market will focus intense scrutiny on the Friday USDA Grain Stocks Report, trying to divine the summer markets from that.
What was planted?
First in importance there will be the expected corn planted acres, not just the expected yields. The trade expects good yields, perhaps more than the farmers who have been looking at yellow corn do. They also expect 2 or 3 million fewer acres than USDA projected in the March 28th Planting Intentions Report. Look for a number of 95.34 million planted acres.
This reduction in acres is already “in the market.” That is, the reality of fewer acres is supposedly already expected with the price of corn now.
I am not totally convinced of that, since it did not feel like prices went up as acres decreased. Rather, it feels like the market thinks we have been having good weather, and that means good yields, regardless of acres.
That is another way of saying that these acres may be looked at more if the crop conditions do not continue to improve.
Crop condition
Officially, USDA says the corn and soybean conditions each improved last week by 1 percent; 65 percent of the corn crop is now rated good or excellent. The same number was reported for soybeans.
Locally, I would think the improvement was even better, as the beans are growing out of the wet conditions that had the lower leaves fired up.
The corn that showed drowned spots and yellow leaves or even stressed purple leaves is now looking better. The yellow corn that Rusty Miller side-dressed Thursday and Friday in Wayne Township, Ashtabula County, is already picking up a little color.
The ammonia nurse tanks are finally cluttering up the roads as field work is caught up after an extended wet period.
Beans still in bags
Traders are still watching wet areas of the country, wondering about crop conditions and wondering if the last of the soybeans will be planted.
I can tell you that the answer is “no,” if only because the insurance payments will look better than the expected late crop, even if the northwest dries out.
Futures market
Corn futures have traded lower the last few days, although the Tuesday markets are better in early trading.
Markets are unhappy with the continued slow pace of exports and happy with the better crop conditions. We exported 5.8 million bushels of corn last week, but needed to do 12 million to keep up with USDA projections.
Looking at some of the market numbers, we see that the July corn, in its last week to be used to price cash corn, is in the middle of the recent wide range.
This morning we are up three and a half cents at 6.56-3⁄4 July futures. The recent low was on the 13th at 6.40-1⁄2. The recent high was 6.83-1⁄2 on the 19th. That is a 43-cent range in a week, which is unusual when there is no real trend.
July soybeans futures had a long uptrend that is in the process of being broken. The low was back on April 5, at 13.36-1⁄2. The high was at 15.58-3⁄4 on June 12. By the 21st we were back to 14.88-3⁄4, but are now trading 15.16-1⁄4.
July Chicago wheat futures have stayed above support, even with harvest of the hard crop well underway and the Chicago crop about to get into serious harvest. The low was at 6.64-3⁄4 back on April 1. We put in a high at 7.36 -3⁄4 on April 30.
Since then anytime we have gotten near the low we bounce off. We were 6.741⁄2 on May 20, 6.74 on May 21, at 6.74-1⁄2 on June 17.
Currently, we are trading 6.83-1⁄4, up four and a quarter this morning.
