More in the Mix

The fear and anxiety over the weather is here and it's not going away for a long time! An accurate planted acreage figure for corn and beans might not happen until the final crop report next January but, we will receive a fresh figure on June 28. We'll also get stocks as of June 1 and it is first notice day against the July contracts.

Trade talk is that when all is said and done that we might lose 6 to 8 million acres from the original prospective plantings figure of corn at 92.8 million acres. Yield and harvested acreage is anyone's guess right now as the trade is following the growing degree units and other key inputs. Corn spreads turned in a little last week as the lack of acreage fear, particularly in Ohio and Indiana sparked a rally in the basis. Yet, the trade has talked about the probability of South American corn moving into the Carolinas as well as the probability of wheat entering the feed ration into the poultry market. High prices brings about adaptation, innovation and increased efficiency! The USDA did say. in a foot note, that they will add another week of crop progress information and delay the final figure for next Monday.

Beans have become sensitive to planting delays this past week yet, there's still ample stocks and the likelihood of increased acreage in South America is growing. Yield potential may be stymied given the late planting yet, it's difficult to get very bullish on spreads unless we get a real disaster and that's a day by day concern until the growing season ends with the first killing frost.

Hard wheat is priced below corn! Wow! Elevators and millers better originate stocks during harvest because once good wheat gets binned there's a high price to pay to get it out! Wet weather does hurt test weight and quality and despite millers being modern day alchemists there could be a bidding war for good quality. Keep an eye on the basis. Hard wheat(KC) being cheaper than soft red(Chicago) is still historically unusual as the old adage that we pay up for protein is not holding water. There's a gremlin in the mix and I don't know when logic and reason returns or what I am missing. Spreads in Chicago have been firm on quality concerns and the 2 ppm vomitoxin stocks may have some value if the quality of the harvest gets really bad given the rains.

Concerns over central bank actions and tension in the Middle East have had an impact on gold and crude oil and might spark a shake up in the grains. Lots of spinning plates to monitor. Overall, weather is still the key to grains yet other factors are moving into the mix!

The information contained on this site is the opinion of the writer and obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in current market prices.

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Steve Bruce


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