We continue to see comparisons being made between this growing season and previous ones with wet springs and what it may mean for weather during the remainder of the growing season.
History indicates this is nearly impossible to predict. In 1993, the spring planting season was cool and wet, and these conditions persisted all growing season.
In 1995, conditions turned hot and dry, which devastated final yield.
There are also years such as 2004 though, when growing season weather was mostly normal, and final yields were at the top end of trade expectations.
One of the main topics in the market right now is what will happen to unplanted corn acres. Trade seems to believe that any unplanted corn acres will either have prevented planting insurance taken on them, or will shift to soybeans.
It is also possible that some of these acres may be seeded to other crops, with milo being an option. This grain could then be used as a feed grain, and soften the blow of lost corn bushels in the supply line.
We are now at a point of the growing season where interest will begin to shift from planting progress to crop condition. More reports are coming in that this year’s corn stand is not very promising.
Plants appear to be yellow from continuous rain and a lack of heat. There are also concerns over fertilizer leaching, and how plants may not have the available nutrients to reach trend yield.
While crop production is the center of market attention at the present time, usage is just as much of a factor for commodity values. The one with the most attention right now is corn for ethanol.
In the past few weeks we have seen ethanol plants close due to poor margins and will remain shuttered until harvest begins and cheaper corn become available. Even then some may remain closed if profitability remains negative.
The United States also continues to lose corn business to other origination points in the global market. The latest has come from Ukraine, where corn is being offered at a 54-cent per bushel discount to the U.S., according to the firm F.C. Stone.
This equates to roughly $1.2 million per vessel. This is more than enough of an incentive for buyers to bypass the U.S. in the global corn market.
How many soybeans China is going to import this marketing year is becoming questionable. From October through May, China’s soybean imports trail last year by 4 million metric tons.
This compares to USDA expectations for soybean imports by China to increase by 10 million tons. This could be from the possibility China is not building its soybean reserves as many economists had predicted given recent market values.
The USDA has collected its acreage data that will be released at the end of June. These figures are already being disputed, as planting is still taking place across the Corn Belt.
The general thought is corn acres will be over-estimated in this release, and soybean acres will be under-estimated.
There are also some thoughts that plantings of both crops will be over-estimated as some acres will be totally abandoned this year.
Karl Setzer is a commodity trading advisor and market analyst at MaxYield Cooperative. He can contacted at email@example.com.
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