Markets are sharply lower to open the day with corn down 15 and soybeans down 25.
With the markets acutely focused on Midwest weather, overnight prices have declined as forecasts continue to show a wet, rainy period ahead for much of the grain growing region. Significant rainfall is forecast for the Midwest over the next 5-7 days. Some forecasting models (GFS/EU) are now calling for flooding rains with amounts expected between 4-8″ in parts of IA, IL and IN. These areas need rain, without a doubt, but would likely prefer for it not to come all at once. Regardless, the market is viewing the rainy weekend forecast as favorable for the new crop yield prospects.
In other news, a survey by Farmers Business Network is expecting the USDA report due next week to show a total of 86.5m acres of soybeans planted, down from the 87.5m forecast in the March 30th report. FBN expects that farmers opted to swap beans for corn to take advantage of the surge in corn prices earlier this year. This same survey also expects next week’s report to show an increase in corn acres from 91.1m to 92.9m acres. If FBN is correct and the soybeans acres do disappear from next week’s report, then we would expect the market to react favorably to this bullish news. As for the corn acreage, FBN’s estimate of a 1.8m acre increase falls well below the 3-4m acres that much of the industry is expecting the report to reflect.
Weekly exports came in below the 10 week average for corn with 8.5 million bushels sold compared to 11.2 for the 10 week average. Soybeans came in slightly above with 5.2 million compared to 3.5 million.
Producers should be actively making sales for new crop for any fall bushels that they need to move. I expect next weeks acres to be 3-4 million acres higher and the current weather trend is going to add yield. $4.90-5.00 fall corn is well off the highs, but significantly above anything we have seen in the past several years.
Have a Safe Day!