Market Commentary > Weekly Crop Commentary

Weekly Crop Commentary

Jun 14, 2019

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Lou Baughman - Region 1 Grain Merchant 

We have new contract highs for nearby corn this morning on the CME. Funds have done a 180 in their corn position in the last couple of mouths, aggressively buying, at yesterdays close being long 200,000+ contracts they are on the short side of the beans with about 80,000 contracts. Exports still struggle, the news out there is that China is wanting to delay July shipments to August, the question is will they cancel the shipments completely in time. African Swine Fever is still running rampant putting the China import needs in limbo. Weather is not cooperating at all. Local guys had 1-2 days this week of fieldwork, the forecast is not looking good for next week either. Any corn acres that may have gone to beans could also not get planted. USDA adjusted new crop corn numbers in Tuesday’s report, lowering the yield projections to 166 but not the planted acres. June 28th another report will be put out on acreage for 2019, look for more adjustments to be made then. Happy Father’s Day!!


 

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Steve Bricher - Region 3 Grain Merchant

Another week of the same. Get started, and they are rained out. Areas around the northwest part of the state did get some work done this week, but we know there are large areas that did not get corn planted. We are now 10 days past the insurance date so what corn that is being planted is because the farmer needs the corn to feed or go in the silo. I wrote last week that I thought we would see around 82 million acres planted; Informa came out yesterday and said 84. The next big question we will deal with is yield. We think we know that corn planted late May and early June is going to have reduced yields; we just do not know how much.

If you have gotten your corn planted and it is looking ok, you are responding to the price action with sales. We have seen a new crop and old crop sold in the last 2 weeks. What are the prices going to do? I do not think we are going to run out of corn as we can reduce exports to help balance the domestic usages; as right now the world customer can buy from South America cheaper than they can buy US corn.

It is going to be a wild ride for the next 15 months as we try to get corn moved around the country to where it is needed. There will be areas of shortage and production curtailed as it will be too costly to buy the corn to make the product or feed the livestock.


 

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Wes Bahan - Region 4 Grain Merchant 

Good Afternoon. Weather once again is front and foremost in our marketplace. This week did allow a little bit of field activity, but only a day or so. The forecasters are calling for our area to receive another 3 to 5 inches of rain over the next week. This will likely spell the end of planting in 2019. Corn basis continues to press higher as the hardest hit areas attempt to get as much old crop corn as they can. With the possibility of prevent plant acres on soybeans now becoming a play we are seeing some of the same play on beans, and if the forecast holds true we could be seeing some replant beans. Now with the Mississippi River closed from St Louis to the north, and eastern processors trying to get as much old crop as they can we are seeing the basis begin to rally some. The end of the month will bring a very important grain stock, and acreage reports.


 

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Ralph Wince - Region 5 Grain Merchandiser 

Good afternoon, the grain markets continue to be on the climb again this week. 2019 crop year is shaping up to go down in the record books and not a record that any of us hope we will see anytime soon again. Here in the NW part of the state, we have made some progress in the last week but after yesterday’s rains and what is in the forecast over the next 5 days, it does not appear that we will see any more planting at least until the end of next week at the earliest. Forecasts this morning are calling for about a total of 2.0 inches of rain from Sat through Monday. Basis levels on corn continue to increase as well as the CBOT as end users seem to be panicking about where they will get corn from. We will see another report from USDA 2 weeks from today on planted acres but most are saying that those could be off as well with the USDA starting there survey at the first of June and with so many acres still unplanted then and even today that the number that they will put out could not be accurate. When USDA survey’s farmers they ask them how many acres they have in and also how many they still intend to plant and they add those together to come with a total amount that is and will be planted. Beans have run higher this week as traders have turned some of their attention to the weather story going forward. There is still plenty of time to plant beans yet but with rain in the forecast over a large part of the belt and the extended maps show above normal precipitation in the 6-10 that will keep traders on edge about beans as well. I hope you all have a great weekend!!!


 

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Melinda Ledley - Director Origination, Logistics and Risk Compliance 

Outside of the grain markets, the stock market has performed fairly well over the last week or so when considering the continuing trade war with China and the increased tensions with Iran. United States producers aren’t the only farmers dealing with weather adversity in the world. The Black Sea region, especially Russia had good early moisture and the planted crop got off to a good start but dryness and heat have settled into the region now causing production concerns there. Dryness in Western Canada is also becoming a watching point. As we reach the midpoint of June on the calendar, we’d normally be looking ahead to the July 4th forecast and corn pollination. Obviously, that event is going to be pushed further into the summer and serves as a reminder of just how far away we are from seeing the final chapter written in this years’ crop production story. All of us in the industry are strapping in for what could be a wild 18-month ride. I’ve yet to talk to anyone that has experienced the conditions we’re currently faced with.


 

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Ed Nienaber - Vice President, Grain Division 

Markets continue to trade higher as planting delays and the continued forecast for rain in the Midwest will delay any additional fieldwork. The basis is screaming higher, as end users in the east struggle to get coverage. Farmers continue to hold tight on to their inventory, with the anticipation of higher prices, the market is finding itself short coverage and working hard to fill the demand. The USDA will release quarterly stock in all position reports and adjusted acreage numbers in two weeks, noon Friday, June 28. Weekly crop condition reports on Monday evening will be watched closely all summer, as we go through the growing season. Informa released their latest estimates on plantings this week and they have corn planted acres at 84.8, down 8.0 million acres from USDA March estimates. Interesting to see that they show Ohio at 3.100 million acres planted, down .400 from this year estimate. Takeaway: There is a tremendous amount of uncertainty in the market place today and I don’t see this changing through the 2019-20 crop year.



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