Tuesday, June 15, 2021

Yesterday’s USDA crop progress report shows 68% of the corn in the good to excellent category compared to 71% last year and a 5-year average of 70%. Nearly all the corn has now emerged. They pegged the soybeans at only 62% good to excellent versus 72% last year and the same for the 5-year average with 94% of the soybeans now emerged. The USDA released a World Ag Supply and Demand Estimate (WASDE) last Thursday and was bullish for corn by adding another 75 million bushels in demand although the market wasn’t able to hold on to the news. Last Friday, there was a general rain across much of the Corn Belt, especially in the northern Plains where there had been some drought concerns, we’ve dropped 35 cents in the last 2 trading days. We have some heat moving into the area again with little chance of rain so the bulls argue the recent rains were not enough to end the drought. Bears on the other hand are arguing for larger planted acres and higher yields. The WASDE report was neutral for soybeans with a slight drop in demand. Soybeans have dropped 53 cents in the last 2 days. Driving through the country, there are a lot of fields that look fantastic. There is a little herbicide damage on Dicamba soybeans but it will soon com out of it. New crop prices at local elevators for corn is $5.45 with soybeans at $13.20.

 

Tuesday, June 8, 2021

Yesterday’s USDA crop progress report shows 90 % of the U.S. corn emerged and 72% in the good to excellent category, just behind last year and the 5-year average. Nebraska is 84% in the good to excellent category, just ahead of last year and the 5-year average. The U.S. has 76% of the soybeans emerged with 67% in the good to excellent category. The monthly supply and demand report is out this Thursday. The U.S. drought monitor has most of North Dakota in an exceptional drought with moderate to severe drought moving into South Dakota, northern Iowa and parts of Minnesota. Temperatures are rising with highs in the 90’s for most of the next 10 days. The scattered showers we had in May won’t last long with above normal temperatures and below normal precipitation. Corn is trying to build on last week’s 45 cent gain and was up 25 cents for awhile on June 6th but backed off before the close. The trade is expecting Brazil to trim their production forecast and tighten the U.S. and global balance sheets. After losing $1.16 from May 7th and are now within 35 cents of the high. New crop soybeans gained back 60 cents last week and took out the contract high briefly this morning before closing just below the May 12th close. New crop corn at local elevators is $5.75 with soybeans at $13.70. The processors are $5.90 and $14.05.

 

Wednesday, June 2, 2021

Grains have rallied off the lows set May 26. Corn dropped $1.16 from May 7 to the 26th, then bounced back 55 cents to today. Soybeans dropped 96 cents from May 12 to the 26th and have rebounded 57 cents to today. Corn is strong as good demand makes the weather very important this summer. Hot and dry conditions across the northern Plains and part of Canada have the trade on edge. With most of the corn now in the ground, the trade is looking at the weekly crop progress report from the USDA. This week shows 76% of the corn is in good to excellent condition. Illinois is 80%, Iowa at 81% and Nebraska at 88%. In 2012, the USDA had 72% of the crop in this category but by the end of July had slipped to just 24%. There is still a lot of debate on the amount of planted acres and yields. The additional acres will most likely pull down the overall yield. Corn could run into technical resistance very soon if the rally continues. The soybean balance sheet is still extremely tight and any weather hiccups will add more risk premium. The USDA has 84% of the soybeans in the ground with 62% emerged. New crop corn prices are $5.50 at local elevators with soybeans at $13.37. Processors are $5.65 and $13.66. Alfalfa prices have been locked at $100/ton for quite some time. Most producers will get there 1st cutting this week.

 

Tuesday, May 25, 2021

Today’s USDA corn progress report shows 90% of the corn is now planted, just ahead of last year and well ahead of the 5-year average. The biggest change were Ohio at 37%. Corn emerged is 64% compared to 61% last year and 54% of a 5-year average. Soybeans are 75% planted versus 63% last year and a 5-year average of just 54%. There are now 41% of the soybeans emerged, higher than last year and the average. Continued strong demand from China has stopped the bleeding but new crop corn has dropped 98 cents since May 7th. We’ve now slipped below the 21-day moving average and are only 15 cents higher than the 50-day moving average. Rainfall across the Midwest, although sparse, has eased drought concerns a bit. Soybeans have also been on the skids but new crop has only dropped $1.20 in the past few weeks; a large drop but a smaller percentage drop than corn. I read a lot about the cattle market that I really don’t understand but there are a few U.S. Senators looking to review anti-trust laws in the beef processing industry. High prices at the meat counter aren’t being shared with the producer. There is a lot of consolidation in the meat packing world. New crop corn prices at local elevators is $5.11 with soybeans at $12.96. The processors are $5.28 and $13.23.

 

Tuesday, May 18, 2021

The USDA released a bombshell report last Wednesday showing US corn supply rising and demand declining. This after months of nothing but bullish news. We all knew that this huge runup in prices was due for a correction, I just thought it would be weather related, sometime this summer. New crop corn production is estimated at 15.0 billion bushels but there is still debate on the number of planted acres. While ethanol usage is projected to increase, corn exports will drop, erasing any increase domestic use. We’re trying to digest the report after new crop corn lost 90 cents since then. Keep in mind that for every million acres added, we add 175 million bushels to the balance sheet so if we jump to 96 million acres, we could add almost 900 million bushels. The stocks to use ratio for last year’s crop is 8.5%, the lowest since 2012. Next year is forecast at 10.2%. The report left old crop soybean ending stocks at 120 million bushels and estimated new crop at 140 million bushels. The trade considered this neutral. New crop soybeans were off 50 cents since the report. The balance sheet on soybeans is still much tighter than corn so any weather issues this summer could push us to lifetime highs. Corn planting progress is ahead of normal with 86% of the corn planted and 61% of the soybeans in the ground. Overall 41% of the corn has emerged. New crop corn at local elevators is $5.14 with soybeans at $13.38. The processors are $5.30 and $11.91.

 

Tuesday, May 11, 2021

The markets took a breather yesterday after new crop corn had jumped $1.80 since April 1 and over 70 cents last week alone. The USDA shows 67% of the corn is planted. Nebraska planted 27% of their corn last week and are now at 71% planted. This compares to 76% last year but well ahead of the 5-year average. All states in the Midwest are planting at a good pace. The USDA  have begun monitoring emergence with 20% of the corn out of the ground. This is just below last year and about the same as the average. Soybeans are 42% planted with Nebraska at 47%; this is well ahead of the 5-year average. Traders are eager to see tomorrow’s USDA supply and demand report. Some bulls are looking at even higher ethanol and export demand for a further reduction in ending stocks. They are also looking for a slight drop in the Argentine and Brazilian crop. Soybeans shouldn’t have much of a change in stocks. Higher grain prices have created a lot of optimism in the rural community. The Ag Economy Barometer is near it’s all time high. This sentiment index is based on a survey of producers and agribusiness leaders. New crop corn prices at local elevators are $5.88 this morning with soybeans at $13.62. The processors are $5.97 and $13.87.

 

Monday, May 3, 2021

Grains push higher again this morning on China purchases, South American harvest delays and weather in the U.S. Most of Iowa is extremely dry extending into Southern Wisconsin and southeastern Minnesota. Nebraska, Indiana and Ohio are also very dry. We keep missing rains but parts of Central Nebraska received over an inch on May 2nd. We are seeing a lot of center pivots running to get the corn germinated but they can only run during the day as it is getting too cold at night. Soil temps are holding steady at 55 degrees. This compares with 58 last year and a 10 year average of just 50. The nearby corn contract added another 80 cents last week and is up $2.00 in the last 20 trading sessions. New crop corn is up $1.00 in the last month. We all remember that when markets go up this fast, they can come down just as fast. There is nothing wrong with reducing some risk and making sales at these prices. The USDA puts corn percent planted at 46% compared with 48% last year and 36% for the 5-year average. Iowa is at 69%, up 49% last week with Nebraska at 42%, up 36% for the week. The record pace for Nebraska is 42% of those acres planted in one week back in 2011. Corn percent emerged is at 8% which is about average. Soybean planting progress is 24%, vs 21% last year. New crop corn at local elevators is $5.40 with soybeans at $12.80. The processors are $5.50 and $13.15.

 

Monday, April 26, 2021

The bull market is in full gear. We were holding steady to moving slightly lower at the end of March but new crop corn has added $1.07 in April with the Board up to $5.59. We continue to make contract highs and haven’t seen these prices for 8 years. We’re currently 56 cents higher than the 21-day moving average and 74 cents higher than the 50-day. Experts are citing uncertainty with Brazil’s 2nd crop production, a continued shrinking balance sheet, Chinese buying and the U.S. weather remains a wild card. We’re in territory we haven’t seen for a long time so make sure you visit with your broker or elevator about locking in some good profits; I’ve heard a lot of people locking in 2022 prices. The USDA will release their weekly crop progress report later today. Farmers are probably around 15-20% complete which is behind the 5-year average. With warmer weather and no rain in the forecast, we’ll see a huge jump this week. On the soybean side, the balance sheet is incredibly tight leaving little error for production problems. Acreage numbers and planting progress will be very important this year. Like corn, soybeans have jumped $1.63 in April alone and up $5.60 from this time last year. Soil temperatures this morning are up to 52 degrees. Corn needs over 100 GDU’s for emergence while soybeans need about 130. Also keep in mind, dry conditions at planting can have a large impact on yield by causing uneven root development. This can affect populations, nutrient uptake and even the size of ears. As a historical perspective, corn prices were $4.98 on 1/21/08, jumped to $7.63 on 6/23/08, dropped to $3.39 by 11/17/08 and maintained a mid $3.50 price for a year and a half. Then we saw prices around $8.00 on 8/27/12 but dropped to $4.68 a year later and $3.56 a year after that. New crop corn prices at local elevators are $5.30 with soybeans at $12.84 with the processors at $5.42 and $13.10.

 

Monday, April 19, 2021

Cold temperatures are sweeping across the Midwest today through Wednesday with lows in the mid-20’s and highs from 40 to 50. We may not see 70 degrees until next week. Soil temperatures have tanked and are now in the mid-30’s. Corn planted when it was warm may have a chance. The imbibition process for corn takes about 48 hours, this is when corn absorbs moisture. Anything below 50 degrees can cause severe harm. This early planted corn is just sitting there waiting for warmer conditions and the longer it sits, the more things can go wrong. The USDA has begun crop progress reports. Last week the U.S. was 4% planted, I don’t look for it to change much. With today’s technology we can plant a lot of corn in a short amount of time. We learned this in 2019. Corn pushed to 8-year highs last week on concern with Brazil and U.S. weather. Some of this early planted corn may need to be replanted but usually corn is safe until the V6 stage. Soybeans gained another 30 cents last week. Bulls are pointing to a possible report showing ending stocks below 100 million bushels. Both crops are anxiously awaiting final planted acres. Chinese imports are up 500% over last year with corn 438% higher. Local new crop prices are $4.85 for corn and $12.15 for beans. The processors are $5.00 and $12.42.

 

Monday, April 12, 2021

The USDA fed the corn bulls again late last week with a favorable ending stocks report, although it didn’t move the market much as a lot of this was already expected. The USDA raised exports by 75 million bushels, corn used for ethanol up 25 million bushels and feed and residual increased 50 million bushels. Global ending stocks were lowered a bit more than the trade was forecasting. Corn ending stocks are pegged at 1.352 million bushels vs 1,919 last year and 2.221 in 2019. South American production was down slightly. Old crop corn on the board is nearing $6.00 with new crop closing in on $5.00, now at contract highs. Weather and China will be the next things to watch. The soybean bulls were disappointed with the USDA putting ending stocks “unchanged” at 120 million bushels. This compares to 525 last year and 909 the year before. Exports were higher but domestic crush was lower. New crop soybeans are at contract highs. Chart watchers are looking at moving averages. December corn is now 20 cents over the 21-day average and 28 cents higher than the 50-day. Soybeans have also moved higher than the moving averages. Fat cattle are $123, just $2 off the high set in mid-February. Good alfalfa is selling at $110 per ton in large rounds, $175 per ton in large square bales. Good grass hay is $95-$100 per ton in large squares. New crop corn at local elevators is $4.68 with soybeans at $11.88. The processors are $4.78 and $12.15. There were some corn and soybeans planted last week, just before rain across most of the state and a drop in temperatures. Soil temperatures dropped to 43 degrees in corn stalks and 44 in soybean stubble after being 50 degrees earlier in the week. We’re still higher than last year and the 10-year average.

 

Monday, April 5, 2021

The USDA gave us a big surprise last week with their quarterly stocks and planting intentions report. The market reacted in a huge way with limit up moves in corn and soybeans from nearby through new crop. Corn stocks came in at 7.701 billion bushels with the trade estimate at 7.767 to 7.952 so within the range. The surprise was in the intended corn acres. The USDA is predicting 91.44 million acres with the trade guess at 93 to 94 million. With this being such a shock, most think the acres will increase and be closer to 93 million by the time we’re done. Nebraska, Iowa and Illinois are all down about 3.0% from last year. The soybean story is very similar with the stocks coming in at 1.564 billion bushels with the trade estimating 1.534 to 2.255 billion, also in the range but closer to the low side. The acres were also a surprise with the trade thinking we will plant over 90 million acres and the USDA predicts just 87.6 million acres of new crop soybeans. Nebraska, Iowa and Illinois were up from last year. If anyone was holding on to old crop bushels, the market just gave you another chance to clean out the bins. Wheat acres were actually higher than the trade guess. This week begins the first full week in April and planters are rolling in parts of the Midwest. The drought map looks very similar to 2012 and worse in parts of Nebraska. Demand is still very good but there could be strains in the US-China relationship. We took out the high from March 9th and have moved 16 cents higher than the 21 day moving average and 26 cents higher than the 50 day. After a year of wearing masks, social distancing and the closure of businesses, it looks like we are turning the tide and getting back to normal. A high percentage of people are getting vaccinated so hopefully this virus will be behind us. New crop corn is over $4.50 at most local elevators with soybeans over $12.00. The processors are $4.70 and $12.35.

 

Monday, March 29, 2021

New crop corn topped out March 3rd and has traded lower, losing 20 cents since. As a chart watcher, corn has moved below the 21 day moving average is only 2 cents higher than the 50 day moving average. Old crop corn has been trading at the upper end of the range between $5.40 and $5.60. We haven’t been this high since July 2013 so there isn’t any reason to be holding old crop at this time. A recent purchase from China didn’t move the market so it seems that a high may be in or tempered by better weather in South America and the potential for more U.S. corn acres this year. A Quarterly stocks report out this week could tell us where we are with the trade estimating 150 to 250 million bushels fewer than last year. Anything less than 7.65 billion bushels would be a win, anything over 7.8 billion would fuel the bears. Coronavirus is still having an effect on the markets as well as severe winter weather, trucking issues and ethanol plant closures. On the soybean side, the news is about the same as corn. Depending on the next stocks report from the USDA, we could see a limit move based on the remaining bushels. The report will also forecast planting intentions with both corn and soybeans expected to show increases over last year. Wheat has dropped over $1.00 per bushel over the past month but there is a lot of bullish news that could turn it around. In other news, a massive cargo ship is stuck in the Suez Canal and delaying shipments in and out of the region. It’s surprising that an event so far from home can have an impact on our markets and supplies of common household products. Mexico is banning GMO corn but this only applies to food-grade corn, corn for livestock is still allowed. Nebraska has been dry since last August and didn’t get much moisture from the snow this winter but a rain in mid-March provided much needed topsoil moisture. We then picked up more rain and are now beginning to replenish subsoil moisture. Warmer temps and no rain predicted this week will have farmers itching to get back into the fields. Planting in Central Nebraska is now less than 2 weeks away. New crop corn prices at local elevators is $4.31 with soybeans at $11.38. ADM in Columbus is $4.49, Green Plains in Central City at $4.39 and soybeans into ADM Lincoln at $11.67.