Grain Marketing Highlights – May 22, 2009

Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu 

U.S. Corn Crop; Sixty-Two Percent Planted
One thing for certain, getting this year’s U.S. corn and soybean crop in the ground is a mixed bag. Overall, a quick glance at Table 1 tells us that 62% vs. the five-year-average planting progress of 85% doesn’t appear to be all that bad, just 8 points behind last year’s pace for the same date. What’s troubling is the rate of progress in the major corn producing states of Illinois, Indiana, and Ohio. Illinois, typically the nation’s number two corn producer, reported only 20% of their corn crop planted, compared to the five year average of 92%. Indiana reported corn plantings at 24% as compared to the five year average of 83%. Both states are also well behind last year’s pace. Ohio is 39% planted compared to the average of 82%. Iowa, the nation’s number one corn producer, reported their planting progress to be equal to the average and slightly ahead of last year at 90%. Next week’s planting progress will be critically important to market participants.

Table 1. Corn: Percent Planted, Selected States¹

¹These 18 states planted 92% of last year’s corn acreage.

Worth mentioning is the spring wheat planting progress, which is running well behind last year’s pace and the average (see Table 2). It has been suggested that delayed planting in spring wheat plantings could result in a reduction in ending stocks for all wheat. This in turn could prove to be beneficial to the winter wheat market.

Table 2. Spring Wheat Percent Planted, Selected States¹

These 6 states planted 98% of last year’s spring wheat acreage.

Market Strategy
The general economy continues to limit possible gains in the commodity markets by the skittishness reflected in economic reports recently coming to bear. Specifically, the U.S. economy is now projected to grow by about one-half the rate previously projected. Further, we are not out of the woods as yet regarding the weather for ’09 crop planting and development. However, we have experienced sizable gains in both old crop and new crop futures prices for corn, soybeans, and wheat since March, led by the soybean market and, more recently, non-commercial interests. USDA’s May projection for ending stocks of U.S. soybeans for the ’08/’09 marketing year was placed at 130 million bushels. That number was no sooner released when the trade started to speculate that U.S. soybean stocks could grow even tighter than the May projection. To some degree, that possibility may depend upon whether we see an acreage shift from corn to soybean production and/or from spring wheat to soybean production. With new crop Dec ’09 corn futures trading at $4.42 per bushel; new crop Nov ’09 soybean futures at $10.15 per bushel; and new crop July ’09 SRW wheat trading at $5.89 per bushel one has to consider advancing new crop pre-harvest sales.

For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.