Farmers across the Midwest are struggling to slam in the last acres of corn and soybeans. Markets are trying to adjust to the idea that all the corn will not be planted, and soybeans will be overplanted.
June 5 was the magic first prevented planting date for corn for crop insurance purposes. It caught many with acres unplanted and decisions to be made about substituting soybeans.
USDA reported planting intentions as of the fourth, and they showed that the country was mostly done, at 97 percent, but that Ohio was still at 94 percent. Ohio was up from the 82 percent of the week before, but was behind the 96 percent average for this time of the year.
Wet and cool
Last year we were at 91 percent planted. It will come as no surprise that the crop is not expected to be a record for yield. May has been too wet and too cool.
The market had always reflected a premium to the new crop that suggested this current huge crop would eventually go away and a new year would be better. Today, June 6, we have December futures about 20 cents better than July.
The July to July spread is now at 40 cents. So, the good news is, we expect much better prices for next year, and they could be locked in. The bad news is that this delayed planting has not helped the corn prices break out.
We are still trading a range that recently has been between $3.79 on May 1, and $3.661⁄4 on May 30. This Tuesday morning, June 6, we are at the top of the range, at $3.781⁄2 July. Much of that nickel gain has come in the last few minutes after 10 a.m.
If we are to break out of this range for corn, it will take a surprise in the number of unplanted acres, or a stretch of bad weather for the crop.
Meanwhile, soybean planting is catching up. Ohio is ahead of normal, with 83 percent of the expected acres planted by Sunday night. That is up from 54 percent the previous week, so it is easy to see what the emphasis has been in Ohio.
Last year at this time we were only 74 percent planted. The nation is 82 percent planted, up from 67. There are a lot of late acres planted in the South, which explains that the normal for this time of year is 79 percent.
Last year we were at 83 percent. Interestingly, even with worries of acres to be shifted, beans are up almost 11 cents currently on Tuesday morning. Much of that has dome after 10 a.m. as is the case with the corn price gains.
The explanation seems to be that the surge of corn planting took the pressure off the acreage pressure cooker. Maybe we don’t end up with as many acres as feared.
But, interestingly, the corn price is also up, so I am open for suggestion what is going on. Wheat prices, meanwhile, are honoring the coming harvest by trading lower most days.
We put in a low on June 1 at July of $4.211⁄4.
The day before the high was $4.391⁄4. That pretty much defines volatility. The wheat is up 11 cents this morning to $4.401⁄2, mostly because of a large drop in crop condition in the winter crop and a big decline in spring wheat conditions.