Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
Corn prices rallied during the month of May across all futures. The monthly USDA report was very friendly to corn prices. In addition, planting progress in the corn belt started extremely slow due to difficult weather. Corn prices swung in the $0.10 – $0.20 range throughout the month. The May rally in corn prices appears to have cooled off as planting continued throughout the month. Depending on local basis levels, this month presented a fantastic opportunity to sell $5.00+ new corn which should be well above breakeven for most dryland production and close for irrigated production. As planting continues and the production season commences, corn price fluctuations will be driven by weather conditions in the corn belt. Make sure to keep up with the corn market during the month of June. Soybean prices experienced a significant rally during the month of May across all futures. Soybean prices rallied the highest during the month of May on the 7th, increasing in a $0.60 – $1.00 range across futures. Market prices retreated after the 7th but held resistance keeping futures above $12.00 per bushel. The discrepancy between USDA and CONAB (Brazil’s version of USDA) still looms over soybean prices. Both CONAB and USDA adjusted their Brazilian crop estimates; making them closer to each other during the month but still quite far apart. These adjustments have allowed for resistance at $12.00 across soybean futures. New crop prices have been attractive considering where prices were a month ago, despite a weak local basis. The overall trend in the wheat market during the month of May was up. Prices increased across futures during the month. Whenever a downturn seemed to appear in market prices, bullish news reaffirmed the rally and prices responded. The USDA monthly report was extremely wheat friendly, in addition concerns exist about the Russian wheat crop, the world’s number one wheat exporter. May presented a fantastic opportunity to lock in wheat sales considering where the market has been over the course of the year thus far. The real question is whether the uptrend will continue into June all the way to harvest time in the Mid-Atlantic region.
The May USDA (World Agriculture Supply and Demand Estimates) WASDE report was published on May 10th and represents the beginning of a new marketing year. The report reflects estimated plantings and the numbers within are vastly different than the April WASDE. WASDE estimated increased corn acreage planted, area harvested, feed and residual demand, total import supply, food demand, ethanol demand, and exports. Corn production decreased from the April estimate. Imports remained the same. Ending stocks decreased from 2122 million bushels to 2102 million bushels. The farm season-average price fell from $4.70 per bushel to $4.40 per bushel. The estimated yield per acre increased from 177.3 bushels per acre to 181 bushels per acre. The April USDA WASDE estimated increased acres planted, acres harvested, production, crushing demand, export demand, and total residual use demand. Imports and residual supply decreased from the April estimate. Ending stocks increased by 31% from the April estimate from 340 million bushels to 445 million bushels. Estimated yield per acre increased from 50.6 bushels per acre to 52 bushels per acre. The farm season-average price fell from 12.55 per bushel to $11.20 per bushel. The May USDA WASDE estimated increased wheat acres planted, production, total import supply, food demand, feed and residual demand and supply, and exports. Wheat acres harvested, imports, and seed demand all decreased from the April estimate. Estimated yield per acre decreased from 48.6 bushels per acre to 48.9 bushels per acre. Ending stocks increased by 9.74% from 698 million bushels to 766 million bushels. The farm-season average price dropped significantly from the April estimate from $7.10 per bushel to $6.00 per bushel.
USDA and CONAB both released reports in May that tightened the discrepancy between the two on how large the Brazilian soybean crop truly is. CONAB’s May report increased its Brazilian soybean crop estimate from 146.5 million tons to 147.6 million tons. USDA lowered its Brazilian soybean crop estimate from 155 million tons to 154 million tons. There still is a 6.5-million-ton difference between the two agencies hovering over the market. USDA will release their next report on June 12th and CONAB will release their next report the following day on June 13th. It will be interesting to see if this difference tightens again and how it will impact markets. The Brazilian second corn crop (safrinha) saw ample rain and growing conditions, despite 10% less acres being planted in Brazil’s largest commodity crop producing region Mato Grosso. CONAB increased the corn estimate from 110.9 million tons to 111.6 million tons. Concerns about the Russian wheat crop has sent market prices soaring in the past few weeks. SovEcon, a Black Sea research firm, dropped the Russian wheat forecast from 93 million tons to 86.7 million tons. The wheat crop was on pace to match the 92.8 million tons produced last year, allowing Russia to dominate the international market, however poor weather such as frost and dry growing conditions has had an impact on this years crop. Ukrainian grain exports are expected to decline this marketing year as the countries ministry of agriculture cut their estimate for combined grain and oilseed harvest from 90 million tons to 81.57 million tons. Despite the war, Ukrainian grain has continued to find its way into the international marketplace, despite Russian attacks on infrastructure. The price shocks of these attacks have diminished and seem to be built into market prices at this point in the conflict.
Corn Futures
Soybean Futures
Wheat Futures
