The joy of watching national news is that there is always bad news somewhere. Today it is all about the flooding in the Southern Plains, with some parts of Texas having historic floods.
Meanwhile, our local weather has cleared again and farmers made a good run in Ohio at finishing corn and soybean planting. Locally, tractors that had been parked were running again. Quiet phones in grain offices this morning were an indication that farmers were too busy with important things to talk to grain buyers.
With the Monday holiday, we won’t have USDA stats on planting progress until this Tuesday afternoon, after this is written.
The floods in Texas were accompanied by news that there was sprout damage in the areas of the Southern Plains that were harvesting. That news was offset in the national view with the idea that rains farther north were filling out the crop. So, it just matters where you are what your perspective is.
What got planted
As for the spring crops in the Midwest, we must now assume that it is all about the acres. What did we actually plant? Were there as many acres of corn as USDA projected in the March 31st report?
At this point, yield is not an issue, since the planting progress of the last two weeks has us positioned for a huge crop. At this point in the year, we always assume there will be no weather problems.
South America
It does not help our prices that the big crop in South America seems to be getting bigger. The harvest is 87 percent done in Argentina, and experts think their crop could end up as big as 60 million metric tonnes. USDA had them at 58.5 mmt in the May report.
That and fast planting would be the reason November soybeans made new life-of-contract lows on Friday. Yes, November soybeans hit 9.06 Friday, May 22, and have already been as low as 9.05 1/4 this Tuesday morning.
We seem poised to get below $9, and that is the lowest price in a long time. Barring a turn to poor weather, beans get cheaper. The old crop beans, which should have been sold some time ago, have also made new lows.
The July futures contract touched 9.22 3/4 Friday. We have stayed above that low so far on Tuesday, but just barely. We are trading 9.24 1/2, up a quarter-cent for the day so far.
News from China
Foreign news for us to worry about is the announcement last week that the Chinese and the Brazilians had signed a deal for the Chinese to spend $53 billion in projects in Brazil. Those are to include investments in agriculture, transportation, energy, and railroads.
This is the future, with what is now the biggest economy in the world spreading influence in other countries. I look back to the billion dollars the Japanese spent in the ’80s starting the Brazilian soybean industry, and wonder what $53 billion of investments looks like.
Every marketing meeting in the early years of this century always forecast that good times were ahead if only the big markets in China kicked in. Over the last 15 years they have, and they have been a big part of our profits. Now we see other countries coming to the party, and it leaves a sinking feeling in the pit of our stomachs.
On the corn side
Corn prices the last week have been cheap, but sideways in a smaller range. This is a market looking to break out, and looking for a reason for that to be higher. We can only imagine what is ahead that would cause that.
The cure for cheap prices is supposed to be cheap prices. For my part, we have been cheap enough, long enough.
July corn futures were just a tick below 3.60 on Friday after a contract low of 3.55 3/4 back on May 5th. Unfortunately, this morning we are back lower after the long weekend. July is now at 3.57 1/4, down two and three quarters for the day so far.
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