Planting season is upon us!

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Corn planting
Corn planting (Farm and Dairy file photo)

Grain prices are still struggling to get back to the highs on the Chicago Board of Trade. Markets are burdened with large domestic crops at a time when the South American harvest is under way in Northern Brazil and moving south.

Corn futures have moved back to within eight or ten cents of the recent highs. Prices were higher during the day March 6, but finished a couple lower at the end of the day. Soybeans made a large move up, but the 11-cent gain was entirely lost by the close. Only Chicago wheat futures held gains, with the May contract up a nickel.

Wheat is strong

If you look at the charts, you can make a case that wheat has been the strongest commodity lately. Maybe that is because, after a five-year low, something had to happen. We made the May futures low at 4.06 the end of December. From there we rallied 71 cents of 477 the middle of February.

By the end of February, however, we were back to 4.38. A quick bounce by March 6 got us to 4.62 1/2, less than 15 cents off the high. It is notable that wheat has made these gains at some times when the corn and beans were not rallying.

Corn on the uptrend

Corn futures have been on an uptrend, with May futures making successively higher highs from late November until the 3.87 1/4 in the middle of February. The last cycle up did not make a new high. We dipped to 3.67 1/4 Feb. 27, then made a high at 3.86 1/4 the next day. Now that’s a bounce! We are currently trading 3.77 Tuesday (March 7) morning.

Soybeans are weak

The soybean futures have actually been the weakest, with the cycles making wide swings, but moving slowly lower. The May soybean futures put in a high Jan. 18 at 10.88 1/4, then a high Feb. 10 at 10.74 1/2, then a high Feb. 28 at 10.56 1/4. That is a 32-cent loss in three cycles. We are now trading at 10.32 3/4, 55 1/2 cents off the recent high.

Futures prices

The South American crop will continue to hurt the prospects of higher futures prices. The large cash movement to the processors on these good prices will limit the cash prices. Some processors have enough beans to run far into the summer now. We are coming to the end of the “advice” season.

Elevators have had marketing and agronomy meetings, inviting farmers to sit through presentations by a variety of experts. Now we are getting within a month of actual planting season.

Spring is coming

It is hard to believe that the orientation of our thinking is coming back around to spring. By the end of this month we will have the pivotal March 31 USDA Planting Intentions Report. This year we could see this change the market, either before the report in anticipation or after the report, in surprise

I still lean toward the idea that, given the planting costs and the relative prices, we will lose corn acres in relation to soybeans. This could mean that over the next couple of weeks is the best chance to clean up old crop beans and sell some new crop. It could also mean that the best opportunity to price old corn may come either just before or just after the report.

Some price management experts have already recommended bean sales of half the crop for the new crop. At the same time we have had opportunities to sell the old crop for over $10. This is a high price with the huge crop we harvested.

Now is the time to put in targets with your elevator so that you don’t miss opportunities when you get busy. The crazy time is not that far ahead.

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