Last week we finally saw a little green in the corn market. It’s been tough sledding as the bears have ruled the market and it has been tough to argue against them. Last week’s planting progress report had corn planting at 75% complete vs. the average of 57%. There was talk that we might see a jump in yield in last week’s USDA crop production report due to the rapid planting pace, but that did not pan out. Yield was left unchanged at 166.8. Growing conditions have been seen as ideal thus far by the market as rainfall has been widespread. The estimated carryout for the current marketing year also continues to put pressure on the market as that figure was bumped up to 1.851 billion bushels in Tuesday’s report. Ample global supplies present an issue to the corn market as well. We continue to hear how great the corn crop in Argentina and Brazil is, and some believe the USDA is too conservative with their production estimates. These facts have kept the bulls on the sideline and allowed the bears to rule.
The late-week rally last week in corn was thanks in part to the wheat market. Crop concerns and quality issues are starting to mount, not only in the U.S. but also in parts of southern Russia, India, eastern Australia, and Canada. The concern here in the US is that we might be receiving too much rainfall across the HRW belt. Low temperatures to start the week are also presenting a threat. Technically, the wheat market was oversold and the bulls were looking for something to grab onto and the crop concerns were just what they needed. The wheat market put together decent gains last week and pulled corn a little higher.
Beans struggled last week as planting progress was also well above the average pace. The average is 20% complete and last week’s figure reported at 31% complete. Last Tuesday’s report was somewhat friendly for old crop beans as carryout reduced by 20 million bushels. However, the new crop carryout sent shockwaves through the trade as the USDA estimated a 500 mbu carryout. Informa added to the negative news on Thursday when they released their planted acres estimate and increased bean acres by 2.55 million acres to 87.2 million. The NOPA crush report was released on Friday and a new record was set for April as crush came in at 150.4 mbu. Even though domestic demand is strong, global production is even stronger. It is a major concern that South America’s export program will have a long tail and continue into the summer and early fall months. This is viewed as a concern because it will have a big impact on the U.S. new crop export program and we are seeing it already as very few U.S. new crop export sales have been put on the books.
Going forward, look for all markets to keep a close eye on weather events, especially wheat. The next few mornings presents a threat for frost potential in western Nebraska and the Dakotas. As we approach a three-day weekend, we may see some position squaring, and the shorts taking their profits as the extended weather forecast is full of uncertainty and presents a lot of risk. It is still very early in the growing season, and a lot is left to see so it’s not completely doom and gloom just yet even though the facts above make it feel that way!
There’s one other thing I’d like you to think about and keep a close eye on. Quality. Check your bins. At several of our locations, we’ve seen high moisture corn and high damage corn coming across the scale this spring. So please make sure you are checking your bins and doing what’s necessary to maintain quality.