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Market Commentary for 5/20/22
For the week:
- July corn was down about 3 cents
- December corn was down about 17 cents
- November soybeans were up over 20 cents
- July wheat finished the week down only about 10 cents
Planting Progress
A planting window may be opening for farmers this week, which could allow more total corn acres to get planted. With the current price advantage clearly favoring planting corn over beans, the market responded this week by pulling back new crop corn values while pushing soybean prices higher. Despite the adjustment, prices still favor corn.
The market is trying to figure out how many corn acres will be planted, especially in the Dakotas and northern Minnesota. With today’s prices, it seems unlikely farmers will take prevent plant and will likely try to get crops planted, even it is late.
Soybeans
The recent increase in Chinese bean purchases, during a time of year that does not usually see big export numbers, likely also contributed to the old crop bean price bump this past week.
Some in the trade think old crop carryout could get tight and prices may need to increase to ration demand. The old crop rally is also pulling up new crop values to encourage more acres get planted.
Wheat
Wheat prices exploded last Monday from India’s news on limiting exports. However, wheat finished the week lower as the market perceived the export limits may not be as restrictive as originally thought. Additionally, the Kansas wheat tour reported slightly higher potential yields than the market expected.
There was news that the United Nations may be brokering a deal to export Ukrainian wheat through Russian ports for humanitarian purposes. Many doubt this will happen, but it did raise some concerns among a few market participants and may have contributed to Thursday and Friday’s price pullback too.
Wheat in the southern US plains and the crop in France are suffering from dry conditions, while it is too wet in the northern US plains and Canadian prairies to get spring wheat planted. With these widespread weather issues and Ukrainian wheat still trapped due to the war, wheat prices will likely stay strong. High wheat prices should keep corn and beans prices elevated as well.
Final Thoughts
For the next few weeks, the market will be focused on planting pace and monitoring weather conditions closely to see how many corn acres ultimately get planted. The market seems to expect much of the corn crop will eventually get planted, since new crop corn values have remained within a 50-cent sideways trading pattern for the last 6 weeks.
Soybean prices moved back to the top end of their recent trading range this week. This may mean beans will buy back a few acres from corn at the last minute in the northern states, as their insurance coverage planting deadline approaches on May 25th.
Want to read more by Jon Scheve? Check out recent articles:
Do Market Conditions Warrant $8 Old Crop Corn And $7.50 New Crop Corn?
Are The Highs In? War And Weather Make Predicting Difficult.
Will Corn Go To $10 This Summer Or Hit $5 By This Fall?
Corn Prices Continue To Trend Higher, But Can It Continue?
Will Corn Be Worth $7 This Fall? Can Beans Remain Above $14?
High Prices Usually Cure High Prices, But Are These Prices High Enough?
Futures Have Turned Sideways. Does Basis Need To Work Higher?
Jon Scheve
Superior Feed Ingredients, LLC
