Prices have taken a sharp correction on the Chicago Board of Trade this week. The crop comes as planting progress has caught up in the Midwest, regardless of expectations this time last week that we would be sure to continue to lag.
Last week, it seemed that the 10-day weather forecast doomed us to a late crop. Commentators were stuck on the idea that we would not make much progress this week.
In fact, the nation has caught up, and Ohio has nearly caught up to the average.
USDA reported after the close Monday, May 12, that the Sunday night progress put us at 59 percent planted, versus the five-year average of 58 percent.
Emergence continues to lag a little due to slow early planting. We in Ohio are 18 percent emerged, and the average is 25 percent.
Ohio stats are encouraging also, if not as good. Northwestern Ohio has made the most progress, but that is where the corn is most concentrated. We are now tied for planting progress with last year, at 40 percent. Ohio’s average is 46 percent.
Interestingly, I would have bet that we did not have that much in last year, but that is probably because of my local bias. I remember a huge percentage last year actually being planted the first week of June. Still, we made a big crop.
The market response to the planting progress has been a little ugly. It seemed like the market was not really rallying much based on the delayed planting. I had speculated that the reason had to do with the big crop we made after late planting last year.
Once the news filtered out that planters were running, the market plunged.
What did the prices actually do? July corn futures dropped 24 1/4 cents off the high in response to the catch-up. July made a high of 5.22 3/4 May 9, but a low on the 12th of 4.98 1/2. We are trading at 5.00 this Tuesday morning, up two and a half cents.
Soybeans prices have cycled on the recent news. The July futures high was 15.21 on April 17, but we had a low on the 23rd and 24th at 14.60 1/2. By the 29th, we were back to 14.96. We are currently trading 14.73 1/4, up eight cents.
Remember, planting progress helps soybean prices in the long run as it limits the potential shift of acres from corn to beans.
I have mentioned before that Amanda Price from our office in Ashland puts out a daily market commentary. (Available if you write her at APrice@tc-coop.com and ask for it.) Her letter from last night had a great picture from Nebraska showing a planter and tractor covered in wet snow, sitting in a snow-covered field.
The snow was the ugly surprise of the day for the western Corn Belt, but it was also good news for the fringes of the Wheat Belt that have been getting a little moisture to alleviate drought there.
Even with that moisture, winter wheat conditions were reported by USDA to continue to deteriorate. The poor and very poor acres are now at 42 percent, up from 38 last week. Good and excellent percentages slipped from 31 to 30.
USDA also showed soybean planting progress having caught up to normal. We have 20 percent planted in the country, versus 21 percent for the five-year average.
Ohio, however, is just 13 percent planted versus a 22 percent average. Ohio farmers have concentrated on planting the corn.
Now the question is, can we maintain the progress. We have a strong front moving across the country. It is good for the planted crops, but some forecasts show four or five days or rain this week.
Last night Ohio had severe weather which left some areas wetter than ever. Southern Trumbull County got as much as three inches of rain last night, although the most northern townships and Ashtabula County got mostly missed.
I am told that southwest of me there is very little planted, and they had heavy rain last night. So, areas of Ohio are two-thirds planted and some areas are just getting started.
If we have another week of rain, we can see a return to the highs in corn prices. This will create a selling opportunity just when farmers will get bullish and put off sales.
Very little corn was sold this last week, even with prices near contract highs. This is the season for “cancel if close” orders, as we in the grain industry laughingly call them.
I continue to preach that old crop beans need to go down the road. Increasingly, this also applies to old crop corn, on any kind of bounce back to the highs.
If we do have a late spring and a poor start to the crop, you have the new crop to price. Sell off the old and be careful of the new.