Markets were weaker this morning with corn down 4 and soybeans down 6.
Weather over the weekend was favorable across most of the Midwest for fieldwork with extended forecasts calling for warmer and drier weather. The 6-10 day weather brings much warmer weather which will see planting progress really ramp up. Expectations for this afternoons planting progress are 6-8% complete on corn with the average being 9%.
The USDA announced a $16 billion dollar package with $3.9 billion to row crops, $5.1 billion to cattle, $2.98 billion to dairy, $1.6 billion to hogs and $1 billion to specialty crops. This is designed to cover a portion of losses from January 1 thru April 15th and then April 15th to the fall. There are many more questions than answers in the package that was released, but it does appear that it only targets unsold grain in the growers inventory.
May crude oil plummeted to a new twenty-year contract low this morning trading at $10.77/barrel as stocks continue to climb with no driving demand.
I cannot emphasize enough that anyone that needing to move old crop corn anytime this spring or summer should get sales on the books! Either cash or basis sales should be made because the end use is not going to be what we are accustom to seeing in the past. I can account for a demand destruction of more than 40 million bushels in Wisconsin alone due to the current situation in the Ethanol industry. This is not confined to WI as every state is dealing with the same issue. There is going to be a lot of old crop corn to move and with another big crop expected this coming fall we are looking at depressed prices for another 12 months +. End users are not going to want to be carrying much of this old crop when we hit September and October due to the quality as they will look to purchase higher quality corn from the 2020 crop. You should also be looking to make some new crop sales for the crop that is going in the ground now. Fall cash prices are hovering around $3/bu and I could easily see them trading in the $2.50-$2.70 range this fall. Basis levels this fall could easily fall to -50 to -60.
Have a Safe Day!