Grain markets: It looked good there for a while

Just after midnight I checked prices, and corn and beans were sharply higher. This, after an ugly week that continued on Monday with a new low on July corn futures of 3.46 3/4. Now the July futures were showing up almost two cents, at 3.50. July beans were 9.41, up over three cents.

So, I tell myself, here we finally come with “Turnaround Tuesday!”

Except that now, after the Tuesday morning “biscuit break the market takes from 8:30 to 9:30,” we are trading, and the market is lower again! Early trading had us holding the gains, but they are now gone.

Now we have July corn at 3.48 instead of the nearly 3.52 high. The July soybeans are at 9.40 1/2 instead of the 9.44 1/2 high. At least the beans are now up nearly three cents. The corn is down a quarter. I still have hope for the turnaround, but it is fading.

Corn, especially, is cheap. We made this new low, and if we are trying to buy corn from farmers, or if we are farmers, we really need to see this to be the bottom.

Unplanted or replanting

The market letters keep talking about better prices this summer, and very shortly the calendar will show that this is summer. When we look out the window, we feel over-blessed. The crops got planted, although there are a few acres near me that got worked up the first time just as the rains hit, and they are still unplanted.

The market thinks that rain makes grain, and they are still preaching that. In fact, too much rain is making less grain for some of us.

We had some discussion in our grain offices June 15 about how the Monday USDA Crop Progress Report would come out. I thought traders would still be looking for the big crop with plentiful rain. Others in the office thought the condition report would show the crop was getting worse. Both sides were a little right.

The report was released at 5 p.m. Eastern time, and it showed corn crop condition to be virtually unchanged at 73 percent good and excellent versus the 74 of the last two weeks. Ohio was at 80 percent good and excellent.

Take what you want out of that. It is a little worse, but darn little. I am willing to bet that it has a reduced percentage for good and excellent next week. This is what the market is trading right now, and it is most of what matters.

Soybeans struggling

The soybeans, struggling to get some height, are in more official trouble. USDA says the national condition is now 69 percent good and excellent. That has slipped from 73 percent last week. That may be why soybeans prices are higher while the corn is stagnant.

Right now field work has stopped. It is easy to find fields with flooded spots. We have had from three to five inches of rain, depending upon where you are. Thunderstorms come up out of nowhere and dump an inch here, while a mile down the road the rains are missed.

Locally we were seeing a lot of corn being side-dressed, but the rigs will be parked this week. Beans that needed the Roundup over the top are getting tall for spraying.

Summer rally?

Farmers still have corn to sell, and few have any of this planted crop sold ahead. The market does not cooperate with late summer rallies very often. We are all hoping this is an exception.

Normally the weather rallies come in June, and we have less than two weeks to see that happen. Right now a weather rally would be based on excess rain, and we don’t want that price gain at that cost to the existing crop.

Now is a time for hoping, and for looking at option strategies. We can’t afford these prices long-term, and we have been too good at production for good prices.

Except for the last few years and a few years in the ’70s, this has been the situation my entire life.