Normally by the second week of June, we have stopped talking about planting and have switched to complaining about the weather. This year we are still doing both.
USDA continues to hold our focus with the report out Monday, June 8, after the close that the soybean planting still lags history. This has some traders saying that all the bean acres will never be planted.
It is no real surprise that showers in the Midwest have slowed the planting of the final bean acres. The TV screens have been filled with pictures of flooding in Texas and Oklahoma, and those wet conditions have extended to the Midwest, without most of the flooding.
Now comes USDA saying that only 79 percent of the soybeans are in the ground, up from 71 the week before, but officially lagging the 81 percent average mark. With continued rain, the question now becomes if farmers will just take the prevented planting dollars and park the planting rigs.
The planting is not such an item in Ohio, where we do have 92 percent planted, against the average of 79. It is more of an issue in Kansas, where only 30 percent is planted, and in the Delta. The Mississippi crop is at 30 percent planted (no surprise), but 60 percent is normal.
Worried about wheat
The real damage of the rains currently is to the wheat crop. The harvest is now 4 percent complete, which is just a third of normal. Oklahoma is at just 13 percent, where 37 is the average. Kansas has not started, but should have 8 percent done.
Where the harvest is running, there are reports of quality issue. Rust is reported, and test weights are reduced. This is not a problem that is going away. The problems are all there, just not realized yet. More rain will make them worse.
Corn, on the other hand
Meanwhile the same rainy conditions has corn markets thinking that rain makes grain. The corn crop conditions is reported at 74 percent good and excellent, the same rating for the third week now.
This would possibly cause us to trade lower on a bigger crop, except that the market had already gone lower on big yields. In fact, corn firmed up on Monday in spillover from wheat problems. The wheat problems have helped prices.
We are trading this Tuesday morning at 5.25 on the July contract, down three cents. However, we have gained 60 cents from the low on the first to the high of 5.34 on the 5th. That change has helped corn back to near the recent high. We were at 3.71 1/4 on the July corn contract on May 19. Friday we got back to 3.66 1/4, and are a couple of cents below that right now. As recently as May 28, we were at 3.48 1/4.
Meanwhile, the soybeans have been in a steady uptrend for the last 10 sessions. In that process, we gained over 30 cents in a few days, to the high of 9.52 on June 5. At the same time the new crop November contract has gained over 30 cents. The recent low was 8.96-3/4 on June 1, and the high was 9.27 on June 5.
This will be the last week that planting progress is a factor on soybeans. By next week we will just be talking about final acres. It remains to be seen if we go higher, or the higher price is right now, on anticipation of smaller final acres. The result is not high prices, just a correction.
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