Prices were sharply lower on the Chicago Board of Trade Monday, and many observers were surprised.
Elevator operators were expecting higher prices after a weekend of wet weather over much of the country meant that the crop planting was still delayed.
Meanwhile, traders in Chicago drove prices lower with a different view. There, the prevailing thought is that the rains we are seeing are good for the standing crops, and that is more important than the acres that remain fallow.
The result was a market that took corn down 16 1/4 cents to 6.50 on the July futures. July soybeans were off a similar 16 1/2, at 15.11 3/4.
For perspective, the recent low for corn was 6.43 3/4 on the 3rd. The recent bean low was 14.72 1/2 May 28.
The price difference between corn and soybeans continues, however. Corn is now toward the bottom of what has been a sideways range. Soybeans have just had the first bad day of a general uptrend that has added $2 to prices in the last six weeks.
Expect this dichotomy between acres and conditions to continue for a few weeks as the crop size remains in doubt.
Crop size at harvest is the issue, and it seems hard right now to expect that exceptional yields will make up for the last acres. USDA released current estimates of crop planting and conditions Monday afternoon that focus on the problems, but not on a clear answer to price direction.
As expected, the Crop Progress report showed corn plantings at 95 percent versus 91 percent last week. We should be done, and the traders expected as much as 98 percent in the report.
Ohio corn planting is done, up from 98 percent last week. Our average is 95 percent at this time.
The problems come in the northern areas, such as Wisconsin, northern Iowa, and the Dakotas. This corn planting means that nearly 5 million acres that were projected to go into corn in the March Prospective Planting Report from USDA are not yet growing.
Talk is that as much as 4 million acres may never be planting this year, given the extended forecast for more showers.
The soybean planting lags even worse, with the U.S. at 71 percent planted now. That is up from 57 last week, but we were at 97 last year, and the average is 84.
Here, again, the question is when we can get done. Based on the intentions, we have 22 million acres left to plant.
Lost in the shuffle as we concentrate on corn and beans is the wheat harvest. We are only 5 percent harvested, against a normal 16. Last year we had an early run that put us at 37 percent by now.
It is hard to remember that the wheat harvest starts in southern Texas the first week of May.
The July Chicago wheat futures have had five cycles since the first of April, with the trend lower. That is, the highs and the lows of each cycle are lower than the one before. The result is that we got within 16 cents of the 6.64 3/4 April 1st low Monday.
The only hope this market has is continued slow harvest. That could help prices at the expense of crop size and quality — never a good trade-off.
So, farmers locally are glad for some rain, with three inches here in the last week. At the same time, the corn is yellow, waiting for more growth, and the shot of ammonia or liquid N that has been planned, but prevented by rain.
We want a dry spell for topdressing and late first-cut haying, then we want timely rains again. We need the weather to cooperate to replace acres our northern brethren did not get in.