As far as traders on the Chicago Board of Trade are concerned, the weather in the Midwest is perfect for the crops. Consequently, they are continuing to crush prices in anticipation of big supplies coming in the fall.
I personally think that the temperatures are too cool, and USDA Crop Conditions Reports out Monday, June 23, confirms that in addition to this, it is too wet in some areas. Crops in Minnesota, for example, had ratings cut.
Overall, the crop ratings dropped 2 percent, but remain at a near-record 74 percent good and excellent for the country.
Nevertheless, the short price turnaround last week that had us thinking we might move prices higher has not lasted, and we are back close to the lows.
Monday was a particularly ugly day for corn, with prices up 3 or 4 cents overnight, yet slipping in early day trading and then sliding all the way to a close that was nearly 9 cents lower than the Friday close.
We are currently trading July corn futures at 4.42 1/4, down over 2 cents for the day (Tuesday morning). The recent high was 80 cents higher than that, on May 9.
December corn futures are a similar issue. The high was at 5.14 3/4, but the low on the 17th was 4.36 1/4, and we are currently (Tuesday morning) at 4.40, down two and a half for the day.
Soybeans are worse right now, with the new crop down 11 cents on the day at 12.22 3/4.
The trend is not as ugly as corn, though. November futures put the high in on May 22, just a month ago. Then we were 12.79, but we dipped to 12.01 1/4 on the 5th. So, with the beans, we are still well above the low.
This is the time of the year when we normally scare up some sort of weather scare based on pollination. It is too hot or too dry or too hot and dry at the critical time, and we worry about hurting the crop.
There is virtually no worry this year, with the earliest corn near pollination and under no stress. Corn locally is much behind that, but we are flush with rain, and comfortable with temperature, if just a bit cool for fast growth.
As a result, it is hard to argue with the direction of the corn market, which has been down. It is also hard to envision a scenario where we can justify a big weather market.
Any recovery will come just as a technical bounce unless we have some late crop problems. We rarely make highs in the corn market once we get a few more days on the calendar.
In Wayne and Williamsfield, Ohio, we had from a half inch to two inches of rain in an evening cloudburst Monday. The ditches ran full in Williamsfield, and the soil is full to the top. I saw a Miller ammonia nurse tank go north through Williamsfield at the end of the rain, and that tank will not now be emptied for a few days. A liquid rig was sitting at the end of another field in the area.
Most of the sidedressing is done around here, but the corn is short enough that there is still time to finish. The cool days have left our late-May planted corn still short enough for field work.
The soybean markets have been defensive on good weather and on the idea that soybeans continue to pour into our country from South America. We are tight on old crop supplies, and have questioned whether we can import enough to keep going. This week we did.
The tightness is continuing to keep the old crop at nearly $2 premium to the new.
Wheat markets are continuing the downtrend. In the U.S. only 30 percent of the crop is rated good and excellent after a dry spring in the Plains, but the worldwide supply remains good, hurting prices. Your harvest prices are now barely above $5.
The winter wheat harvest is a third completed. The soft red harvest in the Ohio Valley has different problems than the hard wheat in the Plains. The hard crop was hurt by dry weather, then the combines struggled between rain drops to get the reduced harvest off. In the Ohio Valley, however, we have reports that the excessive rains of this spring have helped develop high vomitoxin levels and low test weight problems.
I suspect that as the harvest moves north, these problems will be less for our area. Our wheat is later in development, and hopefully escaped the problems of too much rain during head development. Stay tuned for confirmation of this.