Market Commentary > Weekly Crop Commentary - 5/28/2021

Weekly Crop Commentary - 5/28/2021

May 28, 2021

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As we approach Memorial Day weekend and the unofficial beginning of summer, we fine US corn planting at over 90% completed with beans coming in at 75% planted. With the excellent weather the past ten days, Ohio is catching up with the rest of the grain belt with over 75% corn and 65% beans planted. The futures markets for the week are very close to unchanged, however we have seen a tremendous amount of volatility with cash corn futures down the limit one day and up the next. It’s difficult to make this up or to find much of a reason in late May for this type of price action. We have excellent demand in new crop export trade as we are approaching 15.0MMT sales for next crop year. We continue to hear issues with corn crop development in the southern hemisphere; old crop demand remains excellent with increased ethanol margins and feed demand. The futures market is trading on daily emotions, weather forecast and other people’s money and this will continue to move prices until we become comfortable with new crop production. The corn basis continues to remain strong as most if not all end users have little coverage into the summer months. With gas prices hitting $3.00 and ethanol margins at the best levels we’ve seen in over a year local demand will remain strong. The bean basis has seen its best days and some processors are rolling to November futures for pricing cash beans. Memorial Day is a very special holiday as we pay respect for those service men and women who made the ultimate sacrifice for our country. Have a great week and continue to be safe.
 

 
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Good afternoon and happy Memorial Day to all. The unofficial start to summer that usually means food, friends, and fun. We cannot forget the ultimate price that some had to pay so we can enjoy all that. On to this week’s news.  First and foremost, planting progress on corn came in higher than expectations in Monday’s report. This caused a steep sell off on Tuesday, coupled with rumors that China was cancelling corn purchases. The fact that the western part of the growing region had good rains early in the week did not help matters either. We did see some rain in our neck of the woods also, which was a welcomed site. Lack of confirmation of the Chinese cancellations, and the threat of frost this weekend in the northern plains caused the market to rally back to finish the week. For all intents and purposes, the crops in our area are planted and off to a great start. One would have to be prepared to see an additional two to three million acres of corn planted in the June 30 final acre report. Corn basis continues to be steady, but there are some ethanol plants that have paid premiums for quick ship bushels, and once they buy their need that premium goes away.

The bean market continues to struggle as cheaper Brazilian beans are feeding the international market and even working their way onto the east coast of the US. This along with decreasing crush margins has bean basis on the defensive again this week. Planting has shown great progress, even though it was a few points shy of estimates.  We have not seen any reports of soybean sales from the USDA in quite some time, and the imported beans seem to be bridging the gap to new crop. There is a lot of weather to get thorough yet, but every week we do not have a story is one week closer to a big crop.  Hoping for a weather market is not a marketing plan. Hope you all have a happy and safe holiday weekend. 
 
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Quieter trade today going into a three-day weekend, not a lot of news and many of the traders are out today for the holiday.  Because of the long weekend, come Tuesday the market may have a heightened volatility on any new news we might see come out while the market is closed.  It is good that the market picked up what was lost earlier in the week over rumors of China canceling corn contracts that was not confirmed in the export report yesterday.   If you haven’t sold any new crop, it might not hurt to do so.  Crops have all got off to a good start it is all up to the weather for the next three months, and we all know how hard it is to guess the weather. 

 This Memorial Day, please take the time to remember those who paid the ultimate price to protect and preserve our freedoms.  Thank you.
 
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Good afternoon! “Those who have long enjoyed such privileges as we enjoy forget in time that men have died to win them.” (Franklin D. Roosevelt). A thank you is not enough for those who have lost their lives fighting for our freedoms. It has been a slow week with the markets mostly trending lower and then deciding to work their way back up on Thursday. According to StoneX morning comments, “The grains extended yesterday’s rally early last night, but cooler heads have prevailed into the morning hours; the only guarantee in this environment and at these price levels is volatility…” Other comments included “The integration of China’s daily sales flashes into the massive new-crop total was the main export sales report highlight this week, but old-crop corn sales quietly exceeded expectations as well at almost 22 million bushels.” The next WASDE Report will be Thursday, June 10th. We hope everyone has a safe Memorial weekend!
 
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TGIF! It’s been a roller coaster of a week in the grain markets. Nearby corn futures touched both limit down and limit up on separate days this week and had a trading range of 70 cents from Wednesday to Friday. Soybeans also ranged 66 cents between those days and wheat 40 cents. Volatility has been a key word this year and this week has been a prime example. Early in the week, favorable weather forecasts and rumors of Chinese old-crop corn cancellations drove markets downward, but they were able to rebound on a good export sales report. With these huge price swings, target offers are a great tool to utilize in this environment. If there’s a price you have in mind, let us keep an eye on it for you.
 
With today being the last trade day of the month and a three-day weekend, it’s not too surprising to see some profit-taking this afternoon. With 45 minutes left to trade, the good news for soybeans is that they’re still positive on the week. While corn is unchanged-to-down five cents and wheat down nine cents from last Friday.

In closing, let’s take a moment to remember those who gave their lives fighting on our behalf. May we be forever grateful to them and their families. Have a great extended Memorial Day weekend and continue to be safe!
 
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We are coming into the first weekend of the summer season. The Indy 500 is this weekend, it is not the ‘must watch’ event that it was when I was a kid, but it is still special.

The markets this week to say these least, have been crazy; limit down one day, limit up the next and we are in May without a major weather story to talk about.  Most areas of the Midwest are in good shape today. Some of the dry areas have seen rain, we had around a half an inch here before today.  Planting is all but done as I was out riding last week and saw some activity to the north and east but very little going on in the southern part of the state.

We are back approaching $7.00 old corn again; I say that as we are within 10 to 20 cents and with the moves the market has been making that is within range.  If you didn’t get old corn cleaned up the last time, maybe we should this time.  New corn is back over $5.00 as we slipped below there earlier this week.  Yes, we are 80 cents off the highs but if the market forecasters are correct and we added corn acres to the mix since March and yields today look to be trend line, at worst it may be hard for new corn to rally a lot.  New crop export sales have been great so that is helping support the market.

Soybeans continue to be well supported as old crop stocks are going to be tight.  We will have to see at the end of June if we lost some soybean acres to corn.  New crop soybeans over $13.00 looks good today with the crop conditions as they are.  We always have to remember it’s not if we can hit the high, it is about protecting the gains we have made.  We are $5.00 a bushel higher for new crop soybeans today then we were on May 28 last year.  Remember, as we have seen this week, these markets give and they can take away.

As we celebrate this Memorial Day, as it feels a lot more normal than last year, that we remember the men and women who have given the ultimate sacrifice that we may do what we do and enjoy the freedoms that we have today.
 
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Good afternoon, we are receiving some much needed rain here in eastern part of the state today. We have made tremendous progress from a planting perspective the last two weeks. It appears that everyone is either done or within a day or two of being done from my conversations with everyone. The rain we are getting is coming about as perfect as you could ask for. It’s been very light and easy and the crops will take advantage of every bit of it. Temps are cooler for the next couple of days but then we warm right back up the first of next week. This should really make things pop. As far as the markets go we had seen a pull back from the highs over the last 10 days or so but then yesterday we saw everything come roaring back for a solid close and the July21 corn futures were locked up the limit at .40 cents higher. Nothing has really changed fundamentally but we have been seeing some profit taking going on and now that most of the trading is done electronically based off of chart signals it can become a little more difficult to understand this market. Next week USDA will start surveying farmers to get a handle on what those updated acres will look like come June 30th. And as I have been saying for some time now that June 30th report I believe will be a big one for the markets as we trade through the balance of the summer. We also will have a good idea as to what the weather is shaping up to be by the end of June. Each of you has to decide how much risk you are willing to take and you and only you can make that choice. That being said I will once again close by saying this. History has shown us that about 80 to 85% of the time we see the highs in the markets sometime before the crop is harvested. In 2012 when we had a similar type weather pattern the highs came in July that year. I am not saying that this year will be the same but we tend to set our highs when we don’t quite know what the size of the crop is going to be. Monday is Memorial Day and I would encourage all of you to remember all those that have paid the price for what we all enjoy today. Thank those veterans that you know for serving our country and for what they have done for you and for me. Happy Memorial Day to all of you out there.
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Heritage Cooperative
59 Greif Parkway
Delaware, OH 43015



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