Grain Marketing Highlights

Carl German, Extension Crops Marketing Specialist;

Top Five U.S. Corn Producing States Lag in Planting Progress
Wet weather in the Corn Belt is getting to be very concerning when one considers the calendar just registered May 1. On Monday, USDA reported U.S. corn planting to be at 10 percent vs. 35 percent for the 5-year average and 20 percent last year. However, a closer look at the planting progress numbers is even more concerning. The three “I”s: Iowa, Illinois, and Indiana are way behind last year’s progress and the 5-year average. Iowa was only 3 percent planted compared to the 5-year average of 33 percent and last year’s 12 percent. Illinois, reported at 6 percent planted, was 29 percent complete by this time last year. The 5-year average for Illinois is 55 percent. Indiana, at 11 percent planted, was 1 point ahead of last year, but 19 points behind the 5-year average of 30 percent. Minnesota was reported at only 1 percent planted as compared to 20 percent last year and the 5-year average of 27 percent. Nebraska, at 9 percent planted, was 4 percent behind last year and 12 points behind the 5-year average.

Can U.S. corn planting be completed on time? On time is defined here as the end of May, after that time period the odds of not achieving trend line yields increase. Further, the cut-off date for corn planting in the heart of the Corn Belt is June 10th. Planting corn after that date becomes extremely risky. The actual outcome remains to be seen. It might still be possible to get the majority of the U.S. corn crop in the ground by the end of May. However, drier and warmer conditions will have to prevail in order to achieve that objective. We will have to wait and see whether more or less corn acres get planted than the 86 million acres reported in the March 31st planting intentions report. In the meantime, this development will keep the corn market supported at higher levels. Electronic Dec ’08 corn futures were at $6.32 per bushel in overnight trading.

Strike Threat Looms in Argentina
Argentine farmers have been on-again off-again on their threat to strike due to their government’s plan to tax soybean exports on a sliding scale. News that entered the market yesterday indicated that talks between the Argentine producers and their government had run into a snag. Soybean futures took note in yesterday’s trading with new crop futures up 25 cents per bushel at the close. Electronic Nov ’08 soybean futures were at $12.32 per bushel in overnight trading. If the dispute in Argentina does not get settled then we will see a significant rally in soybean futures prices from current levels.

Wheat Harvest Nears
U.S. winter wheat harvest will begin in the Southern Plains in two weeks. Spring wheat supplies are expected to run short this spring. The soft red winter wheat harvest is just two months away. SRW wheat was at $8.07 in overnight Electronic trade.

Market Strategy
Corn and soybean price direction in the near term will be determined by the two primary factors discussed above: the weather and the outcome of the Argentine situation impacting soybean exports. The price of crude oil has dropped about $6.00 per barrel this week. The nearby U.S. dollar index, now at 73.315, is about 2 points higher than recent lows. The markets continue to be extremely volatile.

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