When you thought grain markets couldn’t get worse…

Stalled China trade talks, delayed planting hammers grain markets, US farmers

delayed planting, wet field, Ohio farm,
(Farm and Dairy file photo)

Just when it seemed it couldn’t get any worse for these depressed grain prices, markets crashed, but did not burn Monday, May 6, on the futures markets.

Prices on the Chicago Board of Trade were sharply lower, to say the least, after tweets by President Donald Trump saying that he would raise Chinese tariffs on the $300 billion of goods that had been left at 10%, to 25%, effective Thursday night at midnight.

This, in response to reports from his lead China trade negotiator that the talks had taken a reversal. It has been reported that the Chinese wanted to renegotiate some of the matters that had so far been settled.

Grain market reaction

In reaction to the news, equity and commodity markets crashed. The equity markets returned almost to the previous day’s closes. The commodities recovered somewhat, but did not return to previous levels.

December corn futures were as low as 3.71 3/4, 12 1/2 cents off the Friday close. They settled at 3.82 1/4, down five and a half cents when all was done for the day. July corn futures lost six and a half cents after being down over 15 cents in early trading.

November soybean futures were worse. At one point early Monday, they were a tick below 8.40, which was down almost 25 cents. They recovered to trade a close of 8.53, down 11 1/4 cents for the day.

Previous to this market shock, soybeans were trading steadily lower for weeks. This has accelerated the last couple of weeks as it has become apparent that the corn planting is delayed.

The knee-jerk reaction of the market to delayed corn planting is to assume that will add to soybean acres and add to supply. In fact, many experts are counseling farmers to take prevented planting payments instead of planting late, yield-reduced soybeans. It will be interesting to see how this plays out.

While the soybeans had been trading lower, corn prices had gained most of a dime in the July and 7 cents in the December last week. In fact, since the exhaustion low of April 25 at 3.51 1/2 July and 3.71 3/4 December, we had gained over 20 cents on the July futures and over 16 cents on the December.

Delayed crop planting

Planting progress, as reported by USDA Monday, is seriously delayed. Our Russell conference call Monday morning reported that only Iowa was getting planted, with many farmers there 50 to 100% planted on corn, although the soybean planting is lagging.

Other areas of the Midwest are just like Northeast Ohio, or worse. Here, the ground looks like it is drying and could go by Wednesday, but local farmers tell me that is not true. The crust is getting dry, but it is very wet underneath after heavy rains last week. The dry early spring that we saw when it was too early to plant is now gone.

USDA reports that the nation’s corn planting is at just 23%. This compares to 15% last week, 36% last year, and 46% average. Ohio is at 2%, with no gain from last week. Last year we were at 20%, even though the average is 27%.

The fear is that little corn will be planted this week, with rain in the forecast for much of the Midwest. That would put our planting very far behind.

Last year we had a similar, but not as bad, situation. We were bailed out by a dry spell in the middle of May and extra heat units early that ended up giving us a big crop that was ahead of the trend-line yields. It does not seem, based on current long-term weather reports, that we will see that his year.

Soybean planting progress is maybe even more delayed than the corn. There has been a trend in recent years to plant soybeans as early as corn. Currently USDA reports the nation’s soybean crop only 6% planted, versus 3% past week, 14% last year, and 14% average. Ohio’s soybeans are only 1% planed, and did not gain this week. Last year we had 7% planted at this time, and the average is 9.

For perspective, North Dakota also has 1% of its beans planted. North Dakota!



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  1. Thank you, Marlin, for some common sense and sanity!

    The “Einsteins” at our Federal AG Dept made a bunch of predictions two-weeks before the Midwest flooding. Then, the flooding happened. Son what did they do with their “no longer valid” estimate?

    Presto-changeo-Federal Ag folks said: “Don’t worry–increased production and/or ‘unused’ acres will compensate for any losses that we said two weeks ago.”

    WHAT? One million acres ‘down-and-out’ for the count and it’s ‘no big deal?’ Get real!

    You have.


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