Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Planting Delays Boost Row Crop Prices
Dec ’08 corn futures are trading at $6.67/bushel in this morning’s trading, exceeding the previous life of contract high that occurred on May 9, 2008 at $6.55/bu. Nov ’08 soybean futures, currently trading at $14.29 per bushel, are now within 37 cents per bushel of the life of contract high that occurred on March 4, 2008. The current surge in corn and soybean prices can be attributed to the lateness in U.S. row crop development and the continuing farmer strike in Argentina. Reports this week indicate that some of the U.S. corn crop, a small percentage, won’t get planted; while a portion of the corn crop in the Corn Belt has been replanted as many as three times already. In some areas, the replant acres are running higher than normal. As of today’s date (June 5th, 2008) decisions to plant will increasingly switch corn acres to soybeans. As a result two factors are currently impacting commodity trader’s actions: first, we are not likely to see U.S. corn acres alleviate much from the March 31st Planting Intentions report that projected U.S. farmers would plant 86 million acres to corn this season. If anything, the actual corn planted acres could be less than that indicated in the planting intentions report. Actual plantings will be reported on June 30th. Second, unless growing conditions turn ideal in a hurry, there could be no chance of achieving trend line yields this growing season for U.S. corn and soybeans. Of primary concern right now are the oxygen levels in the wet soils that can impede corn plant development. Nevertheless, within a few days farmers will stop planting corn and switch to soybeans.
USDA will release the June Supply/Demand report on Tuesday, June 10th. We are likely to see reductions in the estimates for ending stock projections for corn and soybeans. Wheat production estimates and stock projections are likely to increase. Private forecasters have projected higher wheat production and ending wheat stocks this week and lower ending stocks projections for both U.S. corn and soybeans.
July crude oil is currently trading at $124.00 per barrel, $9.69 less than the recent high set on May 22nd, 2008. The U.S. dollar index is currently at 73.20, as compared to the low of 71.05 set on April 22, 2008.
A webinar entitled “How to Reduce Price Risk Through Options on Agricultural Futures” will be conducted on June 17th, 2008 in cooperation with Farm Journal Media. Details to follow. For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.