Weekly Crop Commentary - 6/17/2022
Jun 17, 2022
Vice President, Grain Division
The grain markets continue to find support with excessive heat in the Midwest and forecast for much of the same for the coming week. The continued concern of the La Nina weather event pushing from the southwest into corn country has buyer’s attention. Corn prices are trading a dime higher on the week. Basis continues to show signs of improvement as western corn basis continues to trade at a twenty-to-thirty-cent premium over the east. The soybeans cash price is trading down roughly forty cents on the week. Bean basis has come under pressure as tightening crush margins and lack of export business has reduced domestic competition for nearby supplies. The U.S. planted acreage and grain stocks report will be released on Thursday, June 30. This should show adjustments to our 2022-23 carry-over stocks and will be a report worth noting. Commodity market’s will be closed on Monday in observance of Juneteenth national holiday. Please continue to be safe and have a great week.
Director of Grain Purchasing
In Monday night’s weekly crop progress update the USDA has the US corn crop at 97% planted. This was up 3% from the prior week, and right on pace with the 5-year average. They reported that soybean crop was 88% seeded. This is up 10% from the prior week but lagging last year’s pace of 93% seeded at this time. As for Ohio, we have 93% of corn planted, an increase of 6% on the week but behind last year’s 99%. We have 80% of soybeans seeded, an increase of 9% on the week but well behind last year’s pace of 94%. Condition ratings for Ohio have 66% of corn in Good to Excellent condition. This is a 4% drop from the previous week, and behind last year’s rating of 76%. This was the first weekly rating on soybeans. They have Ohio at 59% Good to Excellent, well behind last year’s 72% rating. The wheat crop for Ohio is 86% headed out compared to 79% last week and 91% last year. The hot weather this week should provide significant advances in the crop ratings next week. Basis levels continue to be steady for both corn and beans. There is a lot of corn that needs to move into the marketplace and there are plenty of end users that need to extend coverage. Freight availability seems to be the wildcard that is holding the basis down. Rail is unreliable right now, and diesel prices are driving up the price of truck freight to record levels.
Grain Origination, Kenton (Region 1)
Summer has arrived! You can almost see the corn and beans growing without blinking. It is amazing what hot and muggy days will do for crops. Wheat is also starting to change with the heat. It could be an early harvest if the heat continues as it has this week. Markets will be closed Monday for Juneteenth. Weekend weather forecasts will dictate what direction it will take when it opens back up. The weekend is looking nice. Hopefully the remaining empty fields will get planted so prevent plant will not have to be executed. Happy Father’s Day.
Grain Merchandiser, Upper Sandusky (Region 2)
Quiet end to a volatile week. Market appears to have added in weather premium ahead of a holiday weekend. The next week or so, we will continue to see above average temps and below average precipitation. The ever-changing long-range forecasts continue to battle it out with the potential for major volatility within the grain markets over the coming weeks, in addition to the June 30 acreage report coming up.
The US dollar has rebounded from its sharp selloff yesterday. Inflationary pressure continues as the Fed announced a 75 pt basis rate hike this past Wednesday. Also, saw some additional old and new crop corn sales reported this morning for Costa Rica and Unknown. Expecting to see good wheat harvest progress made this weekend out in the western plains.
Here locally, we’ve seen inbounds pick up this week with customers emptying bins now that this year’s crop is in the ground. With that being said, if you are less than 50% sold on new crop corn and beans, I encourage you to evaluate your marketing plans over the next couple weeks and see if you need to add to your new crop sales since we’re looking at $7+ corn and $15+ beans or at least consider putting some target offers out there. As far as emergence in our region, corn and beans are a little spotty in places, but overall coming up nicely. We’ve seen a lot of side dressing happening over the past week and this hot and dry weather has had the wheat fields starting to turn. Wonder if we’ll see any wheat harvested before the end of June?
Reminder that markets will be closed on Monday for the Juneteenth holiday. Hope you all have a wonderful weekend. I’ll be in the field baling hay this weekend since the sun will be shining!
Grain Origination, Mechanicsburg (Region 3)
Good afternoon! Along with a 20-some cent rally in the corn market, our June corn basis improved a nickel this week bringing corn back to four-week highs. The Region 3 fall corn bid once again reached $7 this morning and some who missed it the first time took advantage of locking in that price. Nearby soybean basis was steady this week, but the futures have not fared well. Soybeans saw big declines at the beginning of the week largely due to carryover bearish sentiments from the macro markets. Markets are keeping an eye on hot and drier forecasts as we head into July.
I’ve seen a lot of spraying being done in the area in between severe thunderstorms and high winds. Many in Logan and surrounding counties are dealing with downed trees in fencelines and yards. As observed from the road, wheat is quickly changing, and harvest will be here before we know it. If you’re not signed up with us for text messaging for harvest hours, be sure to talk to your branch about that. Next week is a short trading week with the markets closed on Monday for Juneteenth. I’d like to wish all the dads out there a happy Father’s Day! You’re tremendously appreciated!
Grain Operation Manager, Urbana (Region 3)
Another week of 2022 has come and gone. While driving around I am starting to see wheat fields turning color. The corn seems like it is growing six inches a day and with the heat this week, the soybeans are really changing.
The corn and soybean markets have defied the greater outside markets by moving higher this week while the stock market slid. We will have to see if the grain markets can hold or rally despite not so go economic news. My big concern for prices going forward over the next 6 to 18 months is, if we see a slowdown in the economy can grain prices hold? You can contract harvest for January corn for over 7.00 and soybeans for over 15.00.
If the economy slows down, do you want to have crop in a bin and not have it protected? Just as farmers saw corn and soybean prices rise last winter, they can also do the opposite. If the farmer has normal yields, today they can lock in the largest spread between cost and selling price that I’ve seen. No one has ever gone out of business making a profit.
Old crop corn and soybeans can be cleaned up at any time as there is a large inverse from July futures to the following months.