The month of May was recorded as one of the wettest in history, in fact, some have stated that much of the Corn Belt reported the wettest May on record in 125 years. This lead to a large surge in commodity prices as production concerns became the main story in the grain trade.

For the month, July corn futures finished with gains of 58 1/2, interior basis widened on the month, but overall cash prices were well above April’s. The new crop December corn contract gained 57 3/4 cents, and basis values were mostly steady. July soybeans finished the month of May 26 cents higher, and the new crop November contract gained 31 3/4 cents. The July Chicago wheat contract saw the largest gains at 67 cents.

As of Sunday June 2nd, it was reported that 67 percent of the corn crop has been seeded, 29 percent behind the 5-year average.

Using the March planting intention figures, this leaves 30 million corn acres to be planted.

Soybeans came in 39 percent planted, 40 percent behind the average pace, which leaves around 51 million acres yet to be seeded. All of the major producing states are substantially behind average, but Illinois is estimated to have the most ground to make up in weeks ahead with 6 and 8 million corn and soybean acres respectively unplanted.

Soybean planting at 40 percent behind average pace is estimated 34 million acres behind the normal pace typically planted for this time of year.

According to data from Advance Trading Inc., if yield is reduced by 10 percent on the 34 million acres and acres are reduced by 2 million due to prevent plant, total production would be down around 270 million bushels. Even with this decrease in production, domestic carryout would still be near 700 million bushels.

Wheat futures finished last week stronger on concerns that excessive rain was damaging the crop cutting yield prospects. Monday June 3rd condition report showed a higher than expected wheat crop rating. Conditions were reported at 64 percent good to excellent, which is a 3 percent increase on the week when expectations were to see a decline.

Last week the House approved a $19.1 billion disaster aid package for U.S. farmers. This package was primarly developed to help producers suffering from damage due to spring flooding. This aid is also said to cover the loss of stored inventory and possibly aid those who were unable to get crops planted in a timely manner.

Since the U.S. and Chinese trade negotiations fell apart last month, little fresh news has been circulating on the situation. Last week, it was said that the Chinese Ministry of Finance is allowing import waivers for Chinese consumers on certain U.S. products. Among the items listed for waivers are pork and beef, which isn’t surprising as the spread of African swine fever has decimated the meat supply in that country.

Sources claim progress is being made between U.S. and Mexico regarding immigration issues. It has been reported that Mexico has offered to send troops to the boarder to slow the flow of undocumented migrants into the U.S. Sources also stating that President Trump is considering delaying implementation of tariffs on Mexican goods which were supposed to take effect Monday, June 10th.

Informa Economic updated their acreage estimates last week. They reported corn acreage at 84.9 million. This is a large 7.9 million acre reduction for the USDA’s March intentions report, and it is 5.8 million below their mid-May forecast. Informa estimates soybean acreage at 85 million acres, 1.4 million below their previous estimate but 420,000 acres higher than the USDA March intentions report.

Informa also updated their yield forecasts last week. For corn, they assumed 174 bushel per acre yield and soybean yield was estimated at 51.1. Considering the overly wet and cool spring conditions, many feel this is overly optimistic. Next week the first crop condition ratings will be released and more historical comparisons will be made.

For more information, you may contact Mick Hoover at (515)-200-5115, or e-mail at mhoover@maxyieldgrain.com. The opinions and views expressed in this commentary are solely those of Mick Hoover. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.