This past month has quietly been a down trend for grain. Producers have been in the field planting both corn and beans, China has cancelled corn purchases, Poland has bought U.S. soybean meal for this summer, and we continue to hear more chatter about El Nino gaining strength and potentially creating weather problems around the world. Closer to home, we remain inverted on both corn and beans to new crop, but demand is slowly solving the problem of having enough bushels to get to new crop, causing old and new crop bids to start to come together. Over the last month, futures prices on both corn and beans have dropped declining demand, ie China cancelling corn purchases and speedy planting progress.
Nationwide planting progress on corn was 65% complete this week with 30% of the crop already emerged. The planting numbers are well ahead of 45% last year and the five-year average of 59%. Beans were 49% planted nationwide. Just like corn, the pace is well ahead of 27% last year and 36% on the five-year average. Nebraska was 76% planted on corn and 62% planted on beans. USDA report last week contained the first crop estimates with a nationwide corn yield of 181.5 and 52.0 on beans. Something to watch as we go forward is the Brazilian export pace on beans. With their record crop, if they don’t keep pace on exports, they have the potential to compete with U.S. bean exports in October.
With the planting pace running ahead of the last years pace, decent rainfall in most of the country, this crop seems to be off to a pretty good start. With the old adage in mind that “big crops get bigger,” it may be a good idea to eliminate some risk and think about setting a floor on part of your new crop production. Cash prices are always a safe bet, but minimum price contracts and HTA’s are a great tool to use as well. Contact your local merchandiser for current bids.
Director of Merchandising and Origination