Weekly Crop Commentary - 5/21/2021

May 21, 2021

Weekly Crop Commentary - 5-21-2021
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This week has been a very busy week for Ohio farmers who played catch-up with planting progress.  Most of the grain belt is well ahead of Ohio and getting close to finishing.  Ohio currently stands at 39% on corn and 29% on beans as of this past Sunday. We should see a vast improvement in the upcoming weeks as fieldwork conditions are now excellent in Ohio. Grain prices for the week have corn up about twenty cents, with basis remaining strong. Improved ethanol margins and excellent feed demand are supporting the corn market.  The soybeans market has not been as fortunate as processors have coverage into the summer months. With the lack of export competition, the bean basis has lost 20-30 cents in the past ten days. When you couple that with futures market down fifty cents, cash beans have taken a beating this week. On the new crop corn front, this has been a week of daily announcements from the USDA. New crop corn sales are closing in on 600 million bushels with two-thirds going to China. While this is very bullish news futures are nearly unchanged for the week. Private forecaster IHS Markit released revised planting intentions with corn at 96.8 and beans at 88.5 million acres. That is 5.7 million acres more on corn than USDA predicted and seems to have offset any bullish enthusiasm in the corn pit. The USDA will release final planting numbers at the end of next month. Weather forecast will now take over for market direction in the coming weeks. Supply-demand tables have been set and we are looking at increased carry-out in both corn and beans.  As difficult as it was to justify new crop corn at 3 dollars and soybeans 8 dollars a year ago, it may be as difficult to defend new crop corn at $5.25 and beans $13.25 this year. Please continue to be safe and have a great week.

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Good Afternoon.  Grain receipts this week really dropped off as fieldwork took priority in the area. Many are on the cusp of finishing. That is amazing considering the last two years we have not even really gotten started at this time.  Now let’s hope we all get a nice shower next week. 

The corn market continued its retreat this week as planting progress marched right along in the areas that were the farthest behind.  Even the large number of Chinese purchases for the next year could not even spark a whole lot.  The USDA flashed sales that amounted to 5.6 MMT of corn.  This takes the two-week total to just under 9.4 MMT. If we look back at the supply and demand numbers released last week the USDA does have them importing 26 MMT of corn, so this is nothing new as it is confirming what the USDA had told us.  Corn basis level are steady as most need to purchase bushels later in the summer but do not want to step out and get more coverage than necessary.  

Soybean futures have followed corn as planting progress has progressed greatly this week.  We have not seen any reports from the USDA in quite some time, and basis levels have back off as South American beans have made their way to the east coast.  NOPA was out this week with their April crush number, and it was below estimates so no bullish news to work off of this week. Weather will be front and center for the next six weeks.
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We wanted warm weather, we got it.  The showers that were called for early this week dried up and appears the forecast is ideal for the next week to finish up the planting and replanting around here and throughout the corn belt.   The markets agree, as of now, there is no reason to think there will not be a bumper crop this fall pushing the market back.  Demand continues for corn, with above-average sales to China.  
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Happy Friday! It has been a slow week here in the office with farmers finally back at it and the markets trending lower. Some are finished up and are now replanting. Earlier this week the USDA pegged corn planting at 80% complete and soybeans at 61% complete. It looks like there are some very small chances of rain for this weekend and a higher chance on Monday. According to StoneX, “…corn is lower today but range-bound overall thanks to ongoing Chinese purchase, with profit-taking mostly reigning across the rest of the market thanks to solid weather overall. The U.S. is set to join most major global wheat producers in strong crop expectations for the coming season…” We hope everyone has a great weekend in the fields!

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Good afternoon! Corn did its best to recover some of the losses after last week’s USDA report. It was mostly supported by China’s six consecutive trading days of large new crop corn purchases. Month-to-date, China has booked a whopping 423 million bushels for the 2021/22 crop year. Decent planting weather through the Midwest has kept corn rangebound though. As of 1:45 this afternoon, nearby corn has gained 17 cents and new crop 4 cents on the week.
Soybeans on the other hand has lacked any bullish news to keep it afloat. Bearish weather forecasts, a weak crush report, and investors taking profit have sunk nearby beans to three-week lows. With a half hour left to trade, July futures have lost 57 cents this week and Nov futures 41 cents.
The wheat market has also taken it on the chin, down 33, with HRW leading Chicago’s SRW downward. Kansas wheat tour this week showed prospects for record yields. Global wheat producers are also expected to have a rebound in production. Ohio’s crop rating on Monday has our wheat at 73% Good/Excellent, much better than our 67% 5-year average. How is your wheat looking?
While these prices are off the highs, I want you to remember where we were just a month or two ago. These are still profitable levels and if you have not contracted any new crop yet, now may be the time. I hope you have a great weekend and be safe out there!
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It seems that summer has arrived this week. You have to love living in Ohio, you can go from running the furnace one day to running the air conditioner the next. 
The warm weather has been nice as I get to ride my motorcycle to work in the morning.  It is a nice ride in when you can see the sun come up and see just light clouds and know that this could be a lot worse.

The markets are still jumping around but we seem to have stabilized a little for the time being.  Crop conditions across the Midwest are good as the dry areas have seen some rain.  I would have to believe that Ohio is going to be planted for the most part by next weekend.  I have talked to a few customers that are having to replant some early corn and soybeans due to some issues from the cold weather earlier in the month.

We are a good 50 to 75 cents off the highs on corn from a couple of weeks ago but are at still very good price levels.  As we move into the growing season we will need to keep an eye on what we have sold and what we are going to need to get sold.  Demand for US corn seems good as China and other consumers keep on buying new crop corn.  If sales pace picks up we could see the USDA adjust new crop export numbers as we move forward.  If stocks tighten we could see a new push on new crop corn prices.

Soybeans continue have very good support as we have shipped 95+ percent of our old crop sales and new crop sales keep moving forward.  Similar to corn we have to keep an eye on what we have sold and what we need to get sold.  $13.00+ soybeans for harvest have to look good in the checkbook at the end of the year when a year ago new crop soybeans prices on May 21 were $8.05 a bushel. That is a $250 an acre improvement in revenue versus a year ago.

Continue to be safe this spring and summer and keep in mind we grow this crop to sell it not just look at it the field or the bin.

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