Unusual spring drives erratic grain markets

First, we did not have much of a winter. Now, we are having an unusual spring.

Winter is more of a delight to me now that my commute is 16 steps instead of 60 miles each way. The snow is beautiful out the window of the office and not out the windshield of a car.

But, in one of the snow capitals of the world, I never plowed my drive this winter. The warm winter has blended into a warm spring that is so dry that some farmers have actually delayed planting, waiting for rain.

Rain came Monday night, and is forecast for much of the week, so maybe that problem is over for now.

For those acres in the ground, the rain was welcome. Many northeast Ohio farmers went to sleep last night with a contented and relieved smile on their lips.

Planting progress

Most farmers showed restraint on really early planting, but were in full swing the last 10 days. The acres that were not planted were at least stirred.

USDA put out its weekly Crop Progress Report Monday afternoon, and it was amazing. The corn numbers were above expectations. The U.S. is now 53 percent planted on corn, up from 38 last week. Last year at this time, in a wet year, we were at 12 percent. The average is 27 percent over the last five years.

Ohio is actually ahead of the nation as a whole, with 57 percent of the corn planted, all in the month of April. Put that in your diary!

We had a huge gain for the week, up from 34 percent. Last year we had barely started, with 1 percent planted, against an average of 20 percent.

The soybean planting is also ahead of normal in the U.S. and Ohio, but about what the traders expected. Last year at this time, Ohio officially had no beans planted. Sunday night we had 16 percent of the crop in, up from 7 percent the week before. Five percent is the average for both Ohio and the U.S.

The nation’s planting is at 12 percent, up from 12 percent a week ago. Last year the U.S. had 2 percent of the soybean crop planted at this time.

Market doesn’t like

The early planting is seen by market traders as good for the crop, not so good for prices. Nevertheless, corn prices are firm, supported by an export sale reported Friday that is assumed to be to China.

Chinese news has a disproportionate effect on prices. With the news, July futures gained 18 cents, with another 8-3/4 on Monday.

With the acreage report, however, we are down a nickel overnight going into Tuesday. Soybean prices have seen continued rallying on the charts. The last two days have produced contract highs. After a dip to 14.63-1/2 Thursday, we had a high Monday at 15.07, up 12 for the day.

With the planting report Monday after the close, beans have adjusted overnight. We are down more than a dime on July soybean futures as we come out of the overnight going into Tuesday.

The new beans are a different matter. There, the high was actually back on April 3 at 13.97. In two weeks, we lost 65 cents, to 13.32. Then, we gained 50 cents back, to the 13.82 high on Friday.

The new beans are significantly lower than the old crop for fundamental reasons. The new crop is expected to be short of acres, but the conditions now are ideal for record yields. Meanwhile, the old crop is being rationed by price to last until September.

Sell at $15

There are those who are looking at the all-time high of 16.63 from 2008 and wondering if it can be broken.

My view is more cautious. Sell the old crop when futures are over 15 and don’t look back. Continue to sell the new crop as it creeps higher.