May 31, 2023
Good morning,
Markets are starting the day lower with corn, soybeans, and wheat all down 8 cents to start the day.
It’s hot and dry across the Midwest this week, but there are increasing chances of rain in the 7–10-day forecasts that have trade trending lower.
Corn planting progress came in at 92% this week, up from 81% last week and 84% both last year and on average; emergence rose 20% to 72%, up from 58% LY and the 63% 5YA. Initial corn condition ratings were 69% good/excellent, down from 73% LY and the 72% 5YA.
Soybean plantings rose from 66% to 83%, up from 64% LY and the 65% 5YA, with emergence up 20% there as well to 56%, versus 36% LY and the 40% 5YA.
The market doesn’t believe crops can get hurt by dry weather in May as long as timely rains come along, which is exactly what the extended forecast is calling for. The Funds started shorting their soybean positions yesterday and are already short corn and wheat.
Forecasts can and will change, but as long as the rains that are on the radar show up, things are looking pretty good and the funds will continue to short the market.
Have a Safe Day!
Garry Gard
920-348-6844
May 30, 2023
Good morning,
Markets are sharply lower to start the day with corn down 13, soybeans and wheat down 23.
The 7-day NOAA forecast doesn’t have much rain in it, but private forecast are calling for a significant change to wetter weather in the 10–15-day forecast. Rains are expected to move into the East next week. The ridge is supposed to break down and let some pretty serious storms work into the Central US, which was not in the forecast when we left on Friday. Prices have fallen on the heels of this forecast.
The USDA’s first corn crop condition ratings of the year will be issued this afternoon. Conditions are thought to be in the 68-73% good/excellent range vs last year’s initial rating of 73%. While good conditions are expected to be seen, dryness concerns in the eastern corn belt could set things back in the coming weeks.
Due to Monday’s holiday, this week’s regular USDA reports will be delayed one day from their regular release days. Accordingly, Export inspections and crop progress will be out today, and export sales will be out Friday. The EIA’s weekly ethanol data will be delayed until Thursday.
I think the market is bottoming and should recover from today’s losses, but weather will have to be the mover.
Have a Safe Day!
Garry Gard
920-348-6844
May 26, 2023
Good morning,
Markets are higher to open the day with corn up 7 old crop and 13 in the new crop. Soybeans are 16 higher with wheat 8 higher.
Dry US weather is causing some short covering ahead of a three-day weekend for Memorial Day. The EU forecast is running much wetter out West and very dry in the Central to Eastern Midwest. The dome doesn’t look quite as pronounced in this latest model run, but still questionable. It looks like there could be a lot of storm activity in the West where drought has been the worst. Monday night’s forecast will be a volatile one, especially if the dome breaks down.
With no markets on Monday, Tuesdays open could be significantly higher or lower. Regardless, I think this is an opportunity for producers to make some old and new crop sales with the current spike in markets. The current “dry” forecasts that are being traded are good in my opinion and will be short lived. Its way too early to kill a crop and a dry May/June followed by wet July and August result in record crops!
Have a Safe Memorial Day weekend!
Garry Gard
920-348-6844
May 24, 2023
Good morning,
Markets are higher this morning with corn up 5 to start the day with traders looking at long term weather forecasts.
A high-pressure ridge is setting up in the Central US driving rain away from the dome. Temps start to heat up in the Central US but are not that hot. The 10-day forecast is dry in a very large area.
The drought alarms are being sounded by a few market participants. When compared to this week last year parts of the western corn belt (mainly NE, NW IA, KS and parts of MO) are dry. The extreme drought conditions are confined to eastern NE and KS and much less widespread across the western belt. We do have areas that will need to see a more normal rain pattern develop throughout the growing season, but we a long way off from calling this 2012.
Ukraine accused Russia of preventing the flow of grain out of the port of Pivdennyi. Ukrainian officials claim that Russia has not allowed Pivdennyi to receive any ships since May 2nd in retaliation for Russia’s inability to export ammonia via pipeline. Under the recently renewed agreement, the ports of Odesa, Chornomorsk, and Pivdennyi are covered to export food and fertilizer. The port of Pivdennyi is the largest port included in the deal when it comes to export volume. This clear violation of the deal has not been commented on by Russia, but it looks as though they are holding this port hostage unless they can move ammonia via pipeline to the port for export.
Have a Safe Day!
Garry Gard
920-348-6844
May 19, 2023
Good morning,
Grain markets are finally showing something other than red this morning. After selling off most of the week we have corn up 12 old crop and 7 in the new crop. Soybeans are up 5 and wheat is up 3.
It looks like a major market low in new crop corn and beans that was formed yesterday on the lower open. That was day three of severe liquidation of speculative longs, while the Funds piled into short positions in corn and wheat at the beginning of the growing season in the US. The Funds are probably going to show up as short beans on the CFTC report this afternoon. Yesterday I saw commentaries that corn was headed to 4 dollars and beans down to 10 dollars as inflation adjusted prices with these carryout’s by the USDA at 2,200 in corn and 330 in soybeans warranted such a move. I don’t think we get that low, especially this early with a long growing season ahead of us. Upside moves will be tough given the lack of demand for old and new crop commodities. Brazilian corn into China is currently .65/bu cheaper than US corn which explains the recent cancellations.
A decrease in open interest in corn is a good sign that a low is being put in place as the at least the Funds are adding even more to short positions.
The Wheat Quality Council Tour estimated Kansas wheat yields at 30.0 bpa at the conclusion of their three-day tour, down from a five-year average of 45.6 bpa and the lowest since at least 2000, though still above the USDA May estimate of 29.0 bpa.
When you look at the map of US weather over the next ten days you can see the formation of a doom of dry air setting up over the Central US. Rain is pushed up into the Canadian Prairies where it’s been very hot and dry over the past few weeks. Rain is also pushed out into Texas, Oklahoma, and Kansas. Much has been made this week about the influence of an El Nino pattern producing above average yields.
Have a Safe Day!
Garry Gard
920-348-6844
