Good Morning,

Overnight corn and soybeans were each down 1-2 cents while wheat was down 9. Look for traders to close the week on a down note today as they head into a 3 day weekend with favorable good planting progress, favorable growing weather and continued Chinese-US tensions.
Basis levels have narrowed across the country as more ethanol plants come back on line with margins improving in the last couple weeks. Farmer selling across the country has been steady despite the low prices as producers continue to need cash flow and monitor their bins. I have heard some talk of producers possibly sitting on grain going into late summer in hopes of higher prices and using the government payments to meet their cash needs. While this may be an option it is not one I would suggest for multiple reasons.
1. The 2019 crop is poor quality with lighter test weight, higher foreign material and higher damage. This all translates to difficulties storing and preventing things going bad in the bin.
2. With a big crop on the horizon, storage will be at a premium this fall with farmers rushing to make space in late August and September ahead of the new crop. This will depress basis levels on top of CBOT prices that will falter as new crop in the south hits the pipeline.
3. The IL river is essentially closed due to flooding which is limiting the loading of barges. This will make it difficult to get all the grain down the river before it closes for work on its lock and dam system in July. These bushels will fill any local markets and work their way north which will depress basis levels.
4. With projections of a 3 + billion bushel carryout next year does anyone expect CBOT prices to rally between now and harvest? In all of my conversations with producers, end users, traders and market experts, no one has a reason for the market to rally for old or new crop.
Producers should take advantage of markets that are currently buying corn at the $3.00 range, add on the .335 cents you will receive from the government and consider $3.335 a great sale. (There may be other state or federal payments that can be added on top of this at a later date) I would also suggest producers lock in some new crop sales at the $3.00 level as this may be as good as it gets. I would not be surprised if the government comes out with a payment for new crop somewhere down the line that would add some premium on top of this making it a good sale.

Reminder that there will be no markets on Monday.

Have a Safe Memorial Day Weekend!

Garry Gard