Strong Planting Progress Means Lower Corn Prices
May 20, 2013
Grains and oilseeds settled mixed awaiting the planting progress report. The bearspreading in corn left the July contract down 3 ¼ cents while December corn was up ¾ of a cent. Soybeans had the opposite, heavy bullspreading brought July soybeans up 16 cents while November finished 3 ¼ cents lower. That makes a new high for the year in the July – November soybean spread.
After the grain markets closed, the USDA released their weekly crop progress report. Corn is now 71% planted which is well above the average analyst estimate of 60-65%. Tonight’s market should be a rather weak open for corn with the potential for a gap lower. The first downside target is the 2012 low of $5.11.
Soybean plantings are now 24% which is still below the 5 year average of 42%. July soybeans continue to trend higher from old crop soybean tightness. Meal has been leading the way. There are rumors of more cargoes getting shipped from South America into the US but overall the futures market doesn’t seem to care.
Winter wheat conditions were down another point from last week at 31% good-to-excellent. Spring wheat is 67% planted compared to 76% on average. Wheat will likely follow corn’s lead during the overnight markets.
We still have a lot of year left but with corn plantings basically caught up and the soil moisture levels recharged we still believe the long term price trend will be lower. For now we want to stay the course with an emphasis on downside protection hedges. If you would like to receive the EHedger grain commentary including complete hedge recommendations, please sign up using the link.
Premier full service commodity brokerage offering risk management services for the agricultural sector as well as professional traders.
Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may not place an order to buy or sell commodity futures contract by e-mail. The market information contained in this message has been obtained from sources believed to be reliable, but is not guaranteed as to its accuracy or completeness. Market information may not be consistent with current or future market positions of EHedger LLC, its affiliates, officers, directors, employees, or agents. EHedger LLC will not disclose anyone's position due to their confidential and proprietary nature. Recipients assume the risk of reliance on and indemnify and hold EHedger LLC harmless for any and all losses, costs, or tax consequences incurred as a result of their use of market information. The contents of this e-mail message and any attachments are intended solely for EHedger LLC's customers and brokers. This communication is intended to be and to remain confidential. Any duplication or distribution without the express written consent of EHedger LLC and this disclaimer is prohibited. If you are not an intended recipient of this message or if this message has been addressed to you in error, immediately alert the sender by reply e-mail and delete this message, its attachments, and any related messages from your computer and destroy any hard copies. If you are not an intended recipient or this message has been addressed to you in error, you are prohibited from delivering, distributing, disclosing, printing, copying, or relying on this message and/or any attachments. Opinions are solely those of the author and subject to change at any time, and are not a solicitation or recommendation to buy or sell commodity futures or commodity options. Past performance is not indicative of future results.