May 20, 2013
Wet weather returns to the Midwest with a vengeance and the grain markets responded accordingly today as planters move back to shelter and wait for more dry weather. A record corn seeding week is expected in this afternoon's crop progress report as seeding moved along very well last week and many were in the field planting soybeans when the rains came. Wheat harvest is gearing up in the south to bring the first reports of 2013 yields as spring wheat planting get shut down in the north.
Stocks started the day slightly higher as the general momentum seemed to be moving the market higher in a day with very little news. By the commodity close, the major indexes had backed off another set of record higher to trade 0.1% to 0.3% lower.
The dollar index stepped back from its highest levels since July 2010 after the run up last week on strength against the yen and euro. The weaker dollar brought a little gain to crude oil prices along with better economic data toward the end of last week.
Corn traded mixed today after the much anticipated rains finally moved into the Midwest yesterday, bringing planting to a halt in many areas. As much as 3 inches of rain fell in places yesterday as a series of severe storms moved from Oklahoma to Illinois and Indiana. Forecasts are for more of the same for the next couple of days. Old crop prices fell today after a better than expected export inspections report showed 14.557 million bushels inspected for shipment last week. New crop corn was up slightly as planting delays are back for a few days. Look for corn seeding to be somewhere near 60% in this afternoon's crop progress report, below the 81% five-year average. Last week brought good weather and the ability to plant at night with new technology may have brought on the largest single week of corn planting in history, which was very much needed to get the 97.3 million acres planted.
July corn futures were down 3.25 to $6.495. December corn was up 0.75 on the day to close at $5.2025.
Bottom line: Poor planting weather continues to support corn prices along with solid demand for a tight old crop. Ethanol margins remain strong and feed use is going to be there through the summer as the tight supply impacts prices of old crop corn.
Old crop soybeans traded higher today as ongoing worries about shipments from South America and tight supplies in the U.S. have built additional strength into this market. Basis has reflected these prices for a couple of weeks, and it appears the market is finally taking notice. More delays in corn planning after this weekend's showers have put pressure back on the new crop soybean price, but large acreage shifts to beans have not been the norm yet.
July soybeans closed up 16 today at $14.645. The November soybean contract was down 3.25 to close at $12.25.
Bottom line: Tight supplies and planting issues are playing into soybean prices. New crop soybeans continue to hold above $12, and could strengthen if corn planting progress is near 70% today. Old crop soybeans have moved above $14.50, presenting cash opportunity to move beans above $15 in many locations as basis remains strong.
Wheat markets traded higher today as rains in Oklahoma and Kansas came with severe weather as they often do this time of year. Moisture is always welcome, but the hope is that damaging weather is not a consequence of receiving some much needed rain. Most of the showers were in eastern parts of Kansas and Oklahoma yesterday, leaving the Southwest Plains mostly dry again. Combine crews from the north have started to move south to begin wheat harvest as we saw our first caravan of combines move through Western Nebraska headed south over the weekend. Yield data will begin to tell the story of the 2013 winter wheat crop a little clearer as those combines hit the field. Rains showers are continuing in the Northern Plains as the Dakotas and Minnesota are being hit again today, bringing further delays to spring wheat planting.
Export inspections were just above expectations for wheat today at 21.149 million bushels. Strong shipments in the past three months have nearly got wheat exports to USDA projections as the market year winds to a close.
July wheat on the Chicago board was up 2 to close at $6.8525. The July 2014 contract closed the day up 1 to finish at $7.35.
July KC wheat was up 7.75 to close at $7.45. The July 2014 winter wheat contract was up 4.75 to finish at $7.81.
July Minneapolis wheat was up 7.50 today to close at $8.1125. The September contract was up 4.25 to close at $7.9925.
Bottom line: Wheat markets are pricing weather and export sales into the spring as new crop wheat is on the horizon. Pricing new crop winter wheat in the Plains for some farmers might need to be delayed until better estimates of yields can be completed.
This week's export inspections were above expectations for corn and wheat, while soybeans were in the range of estimates. Wheat exports remain strong as the market year comes to an end next week. Soybeans are shipping out at historically low levels as the big shipments over the winter have finally caught up with tight supplies.
Weather has been mostly dry in Brazil and Argentina for the past few days, allowing farmers to work toward the end of corn and soybean harvest with few delays. Second crop corn filling in south central Brazil will be assisted by some showers over the next ten days. Most of Argentina looks to remain dry for the next ten days allowing for the final push of harvest and wheat weeding to get nearly completed before a round of showers in early June provide some need moisture for the wheat.
Want to receive market commentary by e-mail twice each day? This service includes added information, charts and graphs to explain market trends, and more. Sign up for the FREE service today - just click HERE.
This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Mr. Burgener does not currently maintain interest in the commodities mentioned within this report.
THERE IS RISK ASSOCIATED WITH TRADING FUTURES AND OPTIONS. ANYONE ACTING ON OUR INFORMATION IS DOING SO AT HIS/HER OWN RISK. CONSULT YOUR FUTURES AND OPTIONS RISK DISCLOSURE STATEMENTS BEFORE TRADING.