The March 31 USDA Prospective Plantings Report continues to define trading on the Chicago Board of Trade. Lower corn acres and higher soybean acres are causing prices to continue a slow decline in the beans and an erratic bounce in corn futures.
Before the report, one commission house speculated that a report of 90 million acres for corn could return us to the highs. So far, they are wrong.
Prices slipped
We had a nice two-day bounce in corn prices, then prices slipped lower. This Tuesday morning, April 11, we are trading corn down a little, still well above the pre-report low, but not wildly higher.
May corn futures are currently $3.66 1/4, down just under a penny for the day so far, and more than a nickel off the high made April 4, the first trading day after the report.
The old high was $3.87 1/4 on Feb. 16.
December corn futures show a similar pattern of bouncing off the low on report day, following higher on Monday, then trading erratically since making the Monday high. For December futures, that was $3.95 Monday compared to the current price a tick under $3.90 more than a week later.
Suffice it to say that, from our perspective now, the lower acres were already being traded, if not admitted to (the trade average guess was published at nearly 91 million acres). We have seen a correction as the low acres were published, but no bullish move.
Muted trading
The soybeans have also had a muted trading pattern after what was a bad report. The soybeans are projected to be planted to the tune of 89.5 million acres, more than a million above the supposed average guess of 88.214 million.
That would indicate a large negative reaction, but it has not happened. Yes, prices are lower, but modestly, just continuing a long pattern of a down trend in soybeans that has been with us since late February.
The May soybean futures are up three-quarters of a cent this morning, at $9.42 1/2. Beans were lower after the report, but the May low was at $9.36 1/2. We should be glad to be six cents above the low at this point. May futures lost 17 cents on report day, but only another eight cents to the Monday low.
November futures followed a similar pattern, where we are now $9.51, down one and a quarter (instead of up a little on the May). The low became $9.46 on Monday the third, so we are a nickel off the low.
New news
Before the report we would have expected the acreage figure we got to give us a freefall in prices for a day or two, but it did not happen What has happened is a fairly stagnant market that now needs new news.
That can only come nearby in the form of a surprise in actual acres or in planting problems caused by weather, or by both. The old crop prices are still defined by the huge crop we produced. The new crop news is concentrating on the negatives of the soybeans, and the positive of low corn acres is not right now overcoming the negatives of the beans by very much.
The Chicago soft red winter wheat crop meanwhile has followed a pattern like corn. We made a low on March 31 before the report, then rallied modestly for two days.
July wheat futures put in a low of $4.29 1/2 on March 31, made a Monday high the next session at $4.46, and the July is now at $4.40 1/2. No big really here, after making a five-year low this winter.
