Soybean prices on the Chicago Board of Trade adjusted Monday, May 19, to the Double Whammy of planting progress and Argentine news.
First, the Argentine farmers’ strike, which has held beans off the world markets, is showing signs of ending. That strike has supported bean prices.
Second, the corn planting progress is catching up, taking some pressure off bean acres. The fear has been that the late corn planting could force more acres into soybeans.
Soybean planting may be underestimated, anyway. While it is doubtful there would be much weather switch of acres, since the acres tend to get locked in by seed availability, there is a trend, at least locally, to more intended beans.
I talk to farmers every day who say they have switched all acres to beans. The biggest reason is production and harvesting costs, which are over the moon. Sharply higher fertilizer costs and amazing drying costs have fueled (pun intentional) the switch.
Trading the report
Going into Monday trading, the talk was that the corn must be 70 percent planted by now. This was the guess being traded, as we anticipated the USDA Planting Progress Report, released after the close of trading on the Chicago Board of Trade. That assumption would represent a serious lag in planting, but a level of catch-up that was in the market prices being traded.
During the day, corn prices declined nearly a nickel and beans were off 45 cents on the old crop and 27 cents on the new.
The actual planting numbers were just what the traders assumed. The nation as a whole is now 73 percent planted, up from the 51 percent of the week before, which was up, if I remember correctly, 24 percent from that previous week. This, nearly half the crop was planted in two weeks.
If you remember that I observed a lot of talk that the acres were not critical until May 15, the timing is good for the catch-up.
Of course, it is a little surprising, given that 88 percent is the norm, that the trade is not more worked up.
The conclusion is simple. With corn futures in the $6 range, we are already worked up. Ohio, unfortunately, did not gain in planting. We planted only 2 percent more, to 52 percent. Last year we were almost done now, at 94 percent. So, if it feels late, it is. The five-year average is 89 percent planted.
More rain ahead
I don’t expect much gain this week, unfortunately. I know of no planting locally since Friday morning, and, although the forecast is better now than it was Friday, There is no clear period definitely ahead. Friday the forecast was for five days of rain, but a couple of those resulted in only widely scattered showers.
Depending whether you were under or merely near those showers defines your mood today.
It is encouraging that, as cool and wet as it has been, it is warm enough for good emergence of corn already planted. What I see around here looks good and looks safe.
Mostly ignored by the markets is that the soybeans planting pace is also lagging. The U.S. is now at 27 percent, up from 11 last week, but well off the 47 percent that is normal. Ohio is at 22 percent, but last year we were three-fourths done, and 63 percent is the average.
What do futures say?
Following recent price changes, we see December corn futures now 45 cents off the all-time high made May 9 at $6.55. We dipped to $6.09 1/2 on both May 15 and the 19. November soybeans have held onto a relatively high price, given the pressures discussed above.
The action has been more in the July futures. The November are at $13.22, after a low at $11.65 on May 1 and a high of $13.66 on Friday.