Will Farmers Plant More Corn or Soybeans?
May 28, 2014
Good Morning! Paul Georgy with early morning comments for May 28, 2014 at 4:40 am CDT.
Grain futures are mixed as old crop soybeans are supported by tight supplies. Planting progress weighs on corn and wheat.
Listen to the May Allendale Ag Leaders Webinar which was recorded last night.
As the calendar gets closer to June 1 and planting progress is back to a normal pace traders are talking about how many acres did the American farmer plant this year? The June 30 report will be very important in determining potential ending stocks for 2014/15. Weather will have its moment as the growing season moves along. However the long range forecast is projecting a cooler summer and adequate moisture which are the ingredients for high yields. The battle lines are being drawn between production potential, money flow and geo-political tensions around the world.
Corn planting, at 88%, was right on the average guess. Emergence is at 60% compared with the five year average at 64%.
Soybean planting, at 57% complete, is above the average guess of 55%. Emergence is 25% complete vs. five year average of 27%.
Spring wheat planting jumped to 74%, far above the 65% estimate. Emergence is at 43% compared with the five year average at 57%.
RJO’s Sao Paulo team is estimating the total soybean lineup for March/April/May (shipped and waiting to be loaded) should be in the range of 750,000 mt. They feel June/July shipments could be 250,000 mt or more which are not showing in lineup yet. From Paraguay they are hearing around 10 cargoes of beans all together so far, some are saying that could be more.
Producers with a high level of crop revenue insurance coverage are seeing current price risks associated with lower prices is greater for soybeans than for corn. November soybeans are about $1.00 above the spring price and December corn futures are only $0.05 above the spring price. Call your Allendale representative today to discuss your options.
Brazil is expected to announce that they will increase the percentage of vegetable oil in biodiesel from the current 5% (B5) to 6% (B6) starting in July and then to 7% (B7) in November of this year.
Livestock traders want to see some proof the hog numbers are as tight as many analysts have projected. Futures have fallen off the recent highs testing technical support. Pork production is running above year ago level due to increased hog weights. Last week slaughter weights were 19 pounds above last year. Even with nearly a 5% reduction in numbers, the extra weight is making up the supply difference. Pork cutout values are down 2.17.
Nearby cattle futures are weaker as traders move out of the June contract. Futures remain at a discount to cash. Beef values were higher with choice up 1.14 and select up 1.75. Packer margins are in the black. Packers will be tough to deal with this week as they will likely pull as many contracted cattle as possible. Cattle producers are adding weight instead of paying the high price for feeder cattle. CME Feeder Index is 191.95.
Markets as of 4:40 AM CDT
- Jul Corn -2 1/4
- Jul Beans +12 1/4
- Jul Wheat -4 3/4
- Jun Cattle +.15
- Jun Hogs -.85
- Jun Dlr +.05
- Jun S&P +2.50
- Jul Crude +.23
- Jun Gold +.20
Chart of the Day
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