Market Commentary > Mid-Week Grain Wire

Mid-Week Grain Wire

May 29, 2019

Soybean futures have been the darling of Chicago today. Funds appear to be making an exit as wet conditions have now pushed soybean planting progress well behind the recent average.
The chart to the left is for the November 2019 contract and gaps higher over the last couple sessions have triggered more fund short covering.
 
Logic has me scratching my head over this rather impressive price move when I consider we could see an increase in bean plantings, we are likely to have over 1 billion bushels of last years’ beans left on September 1st and the loss of demand from a severely depleted pig population in China. However, logic rarely rules the day during a weather market. It would appear the market is trying to send the signal to US farmers that they do still need to plant some beans.
 
The corn market has slowed down today. The 9:30 crowd wasn’t as enthusiastic about carrying on the overnight gains and we’ve actually seen corn futures on the negative side for some time today. We’re still about 1 ½ hours from closing today’s session as I write these comments so there’s still time to claw back, but funds have now managed to liquidate the bulk of the previous record short position so a slowdown shouldn’t be a surprise.
 
With 42% of the corn crop yet to plant, the job of the corn market is to continue to prompt producers to put pen to paper each morning to determine whether planting at today’s price is better than taking prevent plant. A corn balance sheet of 2.035 billion bushels carried over had enough room to give up 1 billion bushels of production. That would have tightened things up and kept weather an important issue throughout the growing season, but with trend yields we’d have enough corn to go around and still have a comfortable carryover. But losing 2 billion bushels of production is another situation. So, the market is still trying to encourage the farmer to plant corn and producers must continually do the math and be prepared if Mother Nature opens a window for that planting to occur.
 
The forecast continues to look wet but showers and storms have become a little more scattered in nature and warmer temperatures are helping to dry the ground a little quicker. This makes determining planting progress locally more challenging.
 


Read More News

Jun 14, 2019
Heritage Cooperative's Weekly Crop Commentary featuring our entire expert grain team.
Jun 11, 2019
Weekly Crop Progress & Condition Ratings thru June 9th
Jun 06, 2019
Rainfall data provided by Climate.