What a difference a few days make. Last week, I was talking about all the negatives in the corn market, especially that the U.S. Department of Agriculture was estimating an all-time record corn crop.
The prediction was that we would plant 95 million acres of 182 bpa corn and produce well over 15 billion bushels. Then, we got World Agricultural Supply and Demand Estimates on April 9, and our current corn supply was estimated to be less than the lowest trade guess.
That kicked off an April 10 and April 11 rally, and March corn futures gained 30 cents for the week. Soybeans, which had not made the gains expected when acres came out of soybeans and into the corn estimate, gained 65 cents. Wheat of all classes went higher, from a dime to 30 cents depending on the class.
In the process of the rally, corn and soybeans made six-week highs. The five days last week were the most active on the Chicago Board of Trade since late 2023.
Big changes
The spec funds made some big changes. The funds have been long 56,757 contracts of futures and options, according to The Commodity Futures Trading Commission, which requires the specs to report to them. This week, that long had been reduced to 53,576 contracts. The funds are now short 102,132 contracts of Chicago wheat futures and options after buying back 10,000 contracts in the last week. The funds also increased their short soybean positions to 50,447 contracts from the 29,890 of the previous week. This is a 15-week high in their soybean positions.
Prices retreated April 14, in what was called a technical correction. That is to say, prices hit resistance levels on the charts, so the chart traders took out some profits. After the fact, there are always fundamental reasons given to explain the technical price moves. In this case, there were export inspections that were higher than anyone expected, and there was a little effect from news that Texas corn planting was not as large as expected since the farmers there were cutting corn acres and planting cotton because of dry conditions.
The second Crop Progress report, out April 14, shows 11 states now have corn planted, with 4% of the acres now planted, just one behind normal for this time of year.
What I did not read, but what can be heard — but not substantiated — is the idea that some money might have come over to commodities as the equity markets took a bath with the Trump tariff war heating up.
In the process of this market change is still talk that, contrary to the negative mood of the last few weeks, we might still have a chance for $5 corn and $11 soybeans. At this point, that is wishful thinking, but the big gains for the week make it seem possible.
There is a lot of weather between now and the first of September. Right now, the 8-to-14-day forecast is for warm and wet weather. That can be a good thing, with enough moisture to get crops started, or it can be wet enough to prevent planting.
Crude oil
One outside market I watch a little is the price of crude oil. Last year about this time, I was hearing the Biden administration claim that they would be buying crude when it got back to $70 to replenish the Strategic Petroleum Reserve. Remember, this had been gutted as a means to slow the growth of the price of gasoline.
I had not heard much about this refilling, but apparently, we now have gotten back over 50% of our reserve capacity restored. We now have 395 million barrels of the 727 million barrels filled. I hope we can get the rest filled as this is not supposed to be used except in emergencies. We may very well have one, what with China saying they are going to take over Taiwan and the Trump administration saying it is not going to allow Iran to have nuclear weapons.
Roundup
Another bit of outside news has to do with the production of Roundup herbicide. Bayer is talking about pulling Roundup from the U.S. market because of the cost of lawsuits from its supposed connection to cancer. I say “supposed,” because if all the commercials on TV were to be believed, half the farmers we know should be dead of cancer.
Roundup is not only our most popular herbicide, it is the most popular ever because of the genetic development of Roundup-ready soybeans and corn. It is used all over the world, and it is hard to imagine how farmers would do without it. We have gotten used to clean fields of beans with one simple spray application, and I hate to think about returning to grassy fields and low yields.
Prices
Reviewing prices, we see that May corn futures, currently, at midnight going into April 15, are trading at $4.93 1/2, up almost a penny. The recent high, on Feb. 19, was at $5.21 1/2. That was followed by a low on March 4 at $4.50 1/4, and then a high March 11 at $4.83 1/4. On March 28, just before the acreage report, we traded as low as $4.50 1/2, but bounced April 14, to $4.97 1/2 as a high.
Soybeans are currently at $10.36 3/4. On March 5, we got to $10.92 1/2, but fell to $9.70 1/4 on April 4. On April 11, we were back to a high of $10.44 1/2.
That’s a lot of volatility.
Chicago May wheat futures are at $5.46 1/2, but touched $6.21 3/4 on Feb. 18. By March 28, we were at a low of $5.17 1/2, but bounced to a high of $5.75 1/4 on April 11.
