Weekly Crop Commentary - 5/12/2023
May 12, 2023
Director of Grain Purchasing
Hope planting season is off to a good start for you all! I’ve seen quite a few planters out the last couple of days. Aside from some chances of rain today and tomorrow, the next two weeks are looking pretty promising weather wise. Grain markets on the other hand have not offered any reprieve this week.
Today’s May WASDE report gave us the first glimpse of 23/24 crop estimates. After the initial release of the report, markets jumped about 10¢ on HRW and white wheat production cuts before quickly settling back down to pre-report levels across the board. Wheat ending stocks are projected to be the lowest in 16 years. US corn however, is expected to see a 2.2 billion bu carryout putting us at a 15.3% stocks to use ratio. As a result, average farm price has declined $1.80 compared to last year and we could be looking at $4.00-4.50 harvest prices. Similarly, US beans are looking at a 7.6% carryout to use ratio and a 335 million bu carryout for the 23/24 crop that is an increase of 120 mil bu. Bean exports are a contributing factor as they continue to decrease on strong South American production. Argentina did not make any changes to their corn and bean production numbers this month, but Brazil did see another slight increase.Depending on how the US growing season goes, $10-12 beans may be the new normal for this crop year. Average farm prices for soybeans have dropped $2.10 compared to last year. Planting progress, weather changes, and crop conditions will continue to be the market’s focus as we go through the next month before the June 30th acreage report. Have a safe weekend!
Grain Merchandiser, Kenton (Region 1)
Kenton has started to use the new probe and scale system. Mark your calendar, we are planning an Open House June 21st to show off the improvements that have been made so far. If you have any questions give us a call.
Grain Merchandiser, Upper Sandusky (Region 2)
Good afternoon and happy Friday!
Wednesday, Thursday and this morning brought sunshine and heat to Upper Sandusky which allowed some farmers to get in the field to work ground or plant. It ultimately depended on how much rain the fields received last weekend. Wyandot and Hancock County are supposed to receive rain tonight and into tomorrow morning. How much you might ask? That depends on who you listen to or watch… some say between 0.5-1.0 inches while others are saying less than 0.3 inches. I will say it would be nice for us to be on the lower side of rain totals this weekend to allow the farmers to get in the field next week. On the bright side, after this rain system passes through tomorrow, we seem to look dry for the next week. Time will tell as always.
I came across the chart below earlier this week and it sure does not look nice. They say history always repeats itself and this is lining up for corn prices to repeat themselves. The chart tracts the December futures from the beginning of the calendar year until end of December. The yellow line is from 2013, corn futures for December (or fall harvest) started at 6.20 and worked their way all the way down to 4.20. The blue line represents the current year. Are we on a path that leads to 4.20 futures? Carryout figures, lack of exports, big Brazilian crops, and tensions with China would make me lean towards saying yes. Now I do not know that we’ll get all the way down to that 4.20 mark, but I think we’ll get into the 4’s and stay there. There is just too much pointing towards lower prices to not think that. With that being said, weather issues such as drought or poor planting conditions could make prices jump as well.
Back in February I did some research on when the best time to contract fall bushels was. I looked at prices on FEB 15th, MAY 15th, and OCT 15th for the last ten years for corn and beans. The results I found were interesting. Contracting on May 15 vs. contracting on Feb 15 or just bringing in it on cash on Oct 15 was far more profitable over ten years. For corn a farmer, that means they would pick up on average an extra 30 cents a bushel compared to bringing it in on cash, and close to 20 cents a bushel compared to contracting in February. For beans a farmer would pick up, on average, an extra 42 cents a bushel compared to bringing it in on cash, and over 20 cents when compared to contracting in February. Keep this in mind as you get seeds in the ground and start to think about new crop. Hope everyone has a great weekend!
Grain Operation Manager, Urbana (Region 3)
This Sunday is Mother’s Day so don’t forget to take care of your moms. The weather this week has been much better and a lot of planting is going forward. I have been able to row some of the early corn and soybeans that were planted in the area.
The markets have been struggling to say the least, there is not much bullish news to find out there today. The US was 50 percent planted last Monday and Illinois and Iowa were over 70 percent. The crop is getting planted and the weather forecast today is not making anyone nervous. The soybean harvest in Brazil is all but wrapped up and the second crop corn is doing very well as their weather pattern has been favorable.We will have to wait and see if we get any news or weather that can help rally this market. The USDA gave us their latest and greatest today. If we don’t have weather issues and there are no news events around the world, prices are going to struggle to move much or any higher this summer. If we get any kind of bump it’ll be time to clean up old crop corn and soybeans. Not something you want to think about, but 5.00 new crop corn and 12.00 new crop soybeans could look good 5 months from now. We will have to wait and see.
Grain Merchandiser, Marysville (Region 4)
Good afternoon. The dust sure was flying yesterday around Marysville. To start the week, Ohio was at 11% planted on corn, behind the 17% average. However, I believe a lot of ground was covered this week and I expect the state to be caught up on next Monday’s report. The nation, however, was 7 points ahead of average with states like Illinois, Missouri, and Iowa significantly ahead. I imagine some states will essentially be done by the next report. National soybean planting was 14 points ahead of average at 35% complete. While Ohio was 6% ahead of average.With everyone in the fields and the markets in the red, the office has been quiet. Cash corn is down over a dime with new corn down more than double that. Soybeans are down 45-55 cents and wheat down 25 cents. In USDA’s WASDE report today, wheat helped corn and beans briefly, but they quickly returned to pre-report lows. I’m afraid it’s going to take some kind of weather disaster at this point to get new crop prices to rally. Please continue to be safe out there and have a good weekend!
Grain Merchandising Intern
Hello everyone, my name is Zane Robison and I am the new Grain Merchandising Intern in Delaware. I recently completed my 2nd year at Ohio State studying Agricultural Systems Management with a minor in Agribusiness.I was born and raised in Champaign County Ohio where my family owns and operates a commercial beef farm where we primarily raise angus-cross cattle. I look forward to meeting and working with all the customers and hope that we can have a very productive summer together!