Grains all lower even soybeans which gave up the early rally above $12 on profit taking and farmer selling. Plus, soybean meal fell off highs with forecasts for better rains in Argentina over the next 10 days.
Wheat was pressured by a higher dollar, poor weekly exports at a marketing year low and Russia competition with prices under $200/metric ton.
Lower wheat also drug down corn despite strong weekly exports at 50.5 million bushels and a sale to Mexico.
Allendale also releasing their annual acreage survey. Rich Nelson says farmers tell Allendale they intend to plant over 2.2 million more acres of soybeans than last year, which is under USDA’s projected 4 million acre increase. For corn, they’re planting only 1.2 million less acres, far less than USDA’s 3.6 million acre cut. The corn soybean ratio favors soybeans and input costs are also lower for beans, so what’s throttling the shift?
He says, “You’re looking at most cash corn breakevens roughly at $5.00 to $5.20 or soybeans at $12 to $12.20 or so per bushel. So, the corn discussion is just about how much do we want to lose at these current bids right now for new crop. 5:29 As it stands right now the survey suggested and farmers are quite consistent with this they suggested that we’re going to stay with standard rotation for now. “
He says farmers also like to plant corn because they can bushel up especially if they get the crop planted early. So weather IS a factor.
Nelson says, “We had a very warm winter, we also have a forecast for a generally warm spring ahead as well so maybe this idea that maybe let’s get into the fields and let’s get some corn planted as soon as we can might be the discussion here for us.”
However, at 93.5 million acres of corn that could potentially result in a record crop of 15.5 billion bushels which would not be friendly for ending stocks or price.
Nelson: “The issue with the corn side is really about the beginning stocks what’s left over from this year’s current old crop. Due to that beginning stock influence we might have a total supply of 17.7 billion bushels that’s almost 1 billion higher than last year. So, the corn side is a significant problem this would imply stocks 2.6, 2.7 billion bushels and that’s easily suggesting futures for new crop below $4.”
They’re projecting soybean production at 4.4 billion bushels with ending stocks below 400 million.
On wheat, farmers intend to plant 1.95 million less acres in 2024. And a 2 million acre drop in winter wheat will be offset by slightly higher durum and other spring wheat acreage still resulting in a 1.9 billion bushel crop.
Cattle also make new near-term highs then fail on profit taking and hedge pressure after filling a chart gap in the April live cattle.
