Isn’t it amazing how a situation can represent so many different feelings and emotions? A change of perspective can give you glimmers of hope instead of tears of despair. A good rain event in the middle of planting can be a glorious feeling if you have been waiting all winter for one or can be a dagger to hopes of record yields.

After spending multiple years with corn holding a $5 handle and beans in the teens, watching the markets can give you the same emotional roller coaster.

The November ’24 soybean market posted an opening high for the year at $12.37 back on the second day of the year. That was a gap lower and began four months of farmers wondering if they will be able to afford growing beans this year. Today we went a half of a cent above $12.30, and it felt different. It was a breath of fresh air.

What will you do with it? I have always encouraged scaled upselling. I like to reward a market for better opportunities. I like doing this with the comfort of having put option or floors below current price levels that will allow me to be patient.

The same type of trading pattern can be said for corn and wheat. Take yourself back to the post-harvest markets with the slow gradual decreasing prices and then a big move down after the first of the year. We were not happy with those prices coming into the new year, but we sure are happy to be here now.

Expectations for Friday’s WASDE

We had these doubts due to the amount of supply that is expected to be harvested over the next five months. On Friday, we will view the first estimates from the USDA in the May WASDE report of the new crop domestic corn and soybean balance sheets.

In corn, the trade is looking for:

In soybeans, the trade expects:

At this point, most of the trade agrees on the anticipated production of corn, soybeans, and wheat in the U.S. You will start to see some discussion regarding the top end of the yields being reduced as we delay plantings from rains that fell last week and this coming week. There is a long time to discuss those possibilities.

My curiosity points me to what the USDA will do with the South American corn and soybean production. Two months ago, we were discussing too much rain in Southern Brazil and dryness in Mato Grosso. Now we are still talking about major flooding in Rio Grande de Sol and infestation of leafhoppers in Argentina.

The private analysts in South America are significantly lower in their estimate than USDA and have recently cut even more production.

Will soybean exports be impacted?

What does another potential 5 mmt cut to world soybean inventory do for potential export business for the U.S.? If the USDA cuts South American production, will they add export expectations for this marketing season or even into the ’24 marketing season?

There are a lot of moving parts when the supply and demand of these commodities get placed on a balance sheet.

Remember, this is the first time we will see the 24/25 ending stocks number and it is anticipated to be over 2.2 billion bushels and soybeans over 400 million bushels. Neither spell out a pretty picture of continuing a rally back to prices we have been accustomed to over the last few years.

While the managed money crowd holds onto a large net short position, we remain optimistic for a seasonal rally to continue to give us slightly better opportunities to sell cash grain. Don’t confuse this stance as a bullish stance.

We realize markets have ups and downs, and we want to have orders in place to take advantage of opportunities that five months ago we decided to pass on.

Stay safe during planting and stay focused on your profitability.

Please feel free to reach out to me at 608-384-5438 or anyone on the AgMarket.Net team at 844-4AG-MRKT. We’d love to hear from you.

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