It should come as no surprise that the grain markets on the Chicago Board of Trade are reacting to late rains.
The corn acres are not all in, and some may never be planted. The soybean acreage is lagging the planting calendar, and may end up reflecting some acres switched from corn.
The result is not necessarily as expected. Yes, corn futures were up a nickel or so Friday, before the long Memorial Day weekend, but on Tuesday morning, May 30, as this is written, they are down 3 cents or so.
The soybeans, meanwhile, took major losses Friday, with the July contract off 13 cents and the November down a dime. Tuesday morning they are only off a penny or so, even though we are talking about increased acres.
The break in corn today seems to be as a reaction to better forecasts that may get the planting finished, even if we give up on some acres.
I am struggling to explain the steady prices in soybeans. Perhaps it just means that, this morning, the market is not as fearful of shifting corn to beans with the better weather.
Delayed report
All this goes on with traders a little in the dark because USDA export reports and Crop Condition reports are a day late. With the holiday, they will be released at the end of the day Tuesday instead of Monday.
Traders expect the corn to be mostly planted, but the condition to be significantly off from last year, mostly because of late planting.
Acerbating the condition is the fact that the East is cooler than normal, and the crop is not jumping out of the ground. As wet as many areas are, the ground stays cool, but with good germination for the late-planted corn.
The overnight estimates are for 63 to 68 percent of the corn crop to be rated as good and excellent when the USDA numbers come in. This is way off last year’s estimate of 72 percent.
Still planting
At the same time, the expected increase in soybean acres is hanging over the market, but they need to get planted. Drier forecasts support the idea that the planting will get done.
We are estimated at 64-68 percent, depending upon which market source you use. We were at 53 percent officially last week.
Locally, most of the acres got caught up in a frantic spell that ended a week ago Since then, there has been rain off and on, and little progress. Most farmers have some acres to finish, but now may switch to beans.
Some I talk to have been snakebit with untimely rains, and have very little planted.
Market reaction
While this planting has been going on, the corn has traded back within a nickel of the highs that have limited prices for a couple of months. The beans, meanwhile, have traded to new contract lows.
July corn futures and December corn have traded in a similar pattern, but with the December most of 20 cents higher. The premium to the December reflects uncertainty with the crop size and the residual effects of the huge crop last year.
Currently July futures are trading 3.71 1/2, down two and three quarters of a cent. The bump Friday gave us a high off nearly 3.75. Recent highs have been at 3.79 1/2 the middle of April, 3.79 the first of May, and 3.77 1/2 on May 22.
December futures are trading 3.89 3/4 this Tuesday morning, down two and three quarters of a cent. The recent highs, the same days as for July, were at 3.95 3/4, 3.95 3/4 again, and 3.95.
The corn is in a very consistent range, especially the December futures. Expect major problems only to break us out to higher ground.
November soybeans, meanwhile, are trading 9.28 1/2, down just a penny. Friday saw a contract low of 9.28, and we are still right about there.
The July wheat futures have spent a few days above the contract low of 4.16 we put in on the 25th of April. This morning we are trading 4.35 1/4, but that is down three cents. The recent high was at 4.61 1/2, on May 2.
