The long Memorial Day weekend was a busy one for farmers finishing planting and for those desperately trying to catch up after being in the areas that have had too much rain.
While planting has been frantic, prices have been trading at the contract highs on all three major commodities.
Although some Midwestern farmers finished planting in the middle of May, many northeast Ohio farmers have struggled to get anything planted between rain drops. They watched the USDA Planting Progress reports with disbelief, as U.S. farmers have kept pace with history even if some locals have not.
We have seen it all — farmers who are done planting, those three-quarters done, but fighting to finish, and those who have consistently gotten the most rain and need more time. We saw sprinkles over the weekend, but no planting-ending rains.
Tuesday morning finds us with a lot of tired farmers, but with most finished or nearly so.
The Monday holiday has delayed USDA Planting Progress reports, but traders estimate that the corn was 90 to 95 percent planted by Sunday night.
While the planting has been going on, traders have put on a contra-seasonal rally in the markets. That is, prices have gone up even as planting statistics support the idea of another huge crop.
Fueled partly by dry weather in the second-crop corn in Brazil and hot weather in U.S. wheat country, December corn futures and July Chicago wheat futures have made new contract highs.
November soybeans are back to the high, just a quarter cent below the 10.60 high of April 2 on last Thursday.
The funds, the large speculators in the market, are now 200,000 contract long corn, according to the latest Commitment of Traders report. This comes as our crop is in the ground and experiencing perfect growing conditions with high temperatures and moist soil. The Brazilian crop is now seen to be under 80 mmt., a number that has been dropping for the last month.
The corn news has helped December corn futures to a 4.29 1/2 high on last Thursday, the 24th. We are currently trading 4.24 3/4. These are prices we did not expect to see, especially with the planting progress.
You may anticipate that the markets will now start to talk about another record corn production year. It remains to be seen if the foreign news will be enough to overcome that production fundamental.
The Brazilians are also the focus of the soybean markets. Another trucker strike has continued through the weekend, stopping the flow of livestock products to market. The main issue was said to be the rising price of diesel fuel, but is now moving on to other things.
Meanwhile, the Commitment of Traders report shows the funds long almost 100,000 contracts of soybeans. This news has helped the November soybean contract back to the high. We saw 10.60 on the 2nd of April, 10.59 on April 10, and now 10.59 3/4 on Thursday, May 24. In between we saw a low of 10.02 just back on May 17.
The hard wheat crop has been stressed by 100-degree temperatures over the Northern Plains, which has also been too dry. Temperatures are lower after the weekend, but the heat has pushed maturity of the wheat without helping it fill out.
Beneficial rains are expected in Kansas in the middle of this week, and that will help, even though they are close to harvest. The north is still dry, causing Minneapolis futures to be more than 80 cents premium to Kansas City futures.
The Kansas City hard red winter wheat is trading 20 cents and more over the Chicago soft red winter wheat that we grow.