This week, we saw a positive recovery for corn, and a little bit of a recovery for soybeans. Friday afternoon, July corn closed up 4 1/4, at $3.83 1/4, and that is up 31 1/2 for the week! December corn closed at $3.98 1/4, finishing up 26 1/4 from last Friday’s close.
For soybeans, we actually lost ground today, with July soybeans down 18 at $8.21 3/4, but that is still up 12 1/2 for the week. November beans lost 17 1/2 today, and finished 14 higher from last Friday’s close.
Here are the end of the week Bull and Bear Factors:
For CORN, bullish news is:
• The main driver is the continued lack of planting progress. Mondays report showed 30% nationally with Iowa at 48%. Both of these were behind the 5-year average. But, the real concern comes in the Eastern Corn Belt, with Illinois at 11% vs. 82% on average and Indiana at 6% vs. an average of 57%. That, combined with rain events this week and a forecast for more this weekend, does not give much hope that these numbers will improve a lot by Sunday.
• Earlier this week, we saw news that the European Commission did not renew anti-dumping duties on imports of U.S. ethanol. The EU imposed these duties (or tariffs) in 2013, and they have been in place since. This is definitely good news for the U.S. ethanol industry.
Some bearish news is:
• The pace of ethanol production continues to lead many to believe there will be another downward adjustment at some point in the WASDE, which will increase the carryout even more.
• The same goes for U.S. corn exports. This week’s number was right in line with expectations at just over a million metric tons. However, in the long run, we’re still below the pace needed to get to the USDA’s estimate for this year.
• $4 seems to be a psychological barrier for December futures. We touched it today, but did not get through
On the SOYBEAN side, bullish news is:
• Soybean prices are higher than the end of last week. Even after the sell off today, beans are more than a dime higher for the week.
• Beyond that, it’s hard to find much more to be bullish about.
Bearish news includes:
• Export shipments last week were near the bottom of the range of expectations. Coming in around 19 million bushels for the week. The previous week saw more than 22 million, and a year ago, it was over 25 million for the same week.
• As with corn, the pace needed over the next few months seems to be un-achievable if we are going to meet the USDA’s current export estimate. They are projecting a decrease of 17% from last year, but we are on pace for a 27% decrease.
• South American production estimates were increased slightly again this week by private forecasters.
• Finally, there is still no deal with China, and we’re expecting more than 900 million bushels of ending stocks this year.
This week was what most, if not all, of us have been hoping for, at least for corn prices. And it was definitely rewarded by the farmers. Earlier in the week, we were buying mostly Old Crop corn as people used this as an opportunity to play a little catch up. Today, with December futures nudging up to the $4 mark, we saw a lot more New Crop being sold. Soybean sales were not anywhere near as aggressive, and rightfully so, but of those sales we saw, almost all of them were for Old Crop. Again, it felt like we had some folks playing catch up. “IF” we continue see more rain events and planting progress continues to lag, we should expect a little more of a rally. Continue to touch base with your GMA about pricing goals and offers. And as we’ve mentioned the past couple of weeks, keeping an eye on 2020 futures levels might be worth considering.
On the latest Landus Cooperative Experience podcast, we cover these items and more. Plus, we also have a bonus feature discussing planting issues and the agronomics of corn being planted late with Kent Klingbeil, an Agronomy Regional Sales Manager. You can find the a link to the podcast here, on our website under market commentary, or download the app on your smart phone.