Good Morning!
I hope all is well on your operation. While it’s cold around ours, we got back in the field on Wednesday. Given our forecast was for a quarter-inch of rain at most and warmer temps next week, we decided to get back after it. I’d be lying if I said I wasn’t concerned about the corn we planted a week ago…but we’ve been quite lucky around here in that we’ve missed the rains. While the corn isn’t doing much, we don’t have to worry about cold and wet soils. The last couple of days I’ve thought in the morning that those who were planting were crazy…then by the afternoon I’ve wondered why I wasn’t planting. It’s a strange year for sure with cold temps but the ground is working like a dream. IF our forecast verifies with little precip and temps in the 60s next week, we’ll have 75% of our farming finished in the next week. I realize some of you are shaking your heads at that…but especially on our black ground, we have had excellent success in the past planting early, even when it’s been cold. Keep us posted on how things look around your place…Weappreciate the dialogue. matt@agmarket.net
The corn and bean markets stunk it up on Wednesday…especially the corn. With talk of the economy continuing to struggle, money seems to still be flowing out of commodities. Often in times like these, commodities are a safe-haven for investors…but this go-round that certainly isn’t the case. While weather in Brazil is still not ideal, most view the US situation for especially corn as one that is burdensome and potentially incapable of a turn-around while energy is under so much pressure. With May crude settling under $20 at $19.91, we were off 20 cents on the day. The DOW also moved lower, settling down 489 points at 23,391. The Dollar was in rally mode, settling up .6 on the day at 99.48…so we saw plenty of pressure from the outside markets on what most would call a risk-off day.
Corn – The corn market had another rough day. May corn settled 6 ¾ cents lower at $3.19 ¼. This was 7 ½ cents off the high and a penny and three-quarters off the low. The EIA report from the Department of Energy was down once again. We saw another big decrease in corn usage of about 10 million bushels. At just under 56 ½ mb, usage was off and ethanol stocks were again sharply higher. We’re down 44 million bushels in corn usage from just three weeks ago…and stocks are up slightly on the week but over 21% higher than where we were a year ago! The cash market looks sick. While it’s tough to sell at a low price, I’m not sure anyone can predict just how low prices could go. My assumption is there’s plenty of interest ‘in the trade’ to take corn down below $3…it sure seems to be heading that way. While I would struggle to sell new corn down here this early in the year, I’m not sure I’d argue with anyone who simply wanted to throw in the towel. I hope we see a nice rally here in 2020, but I’m not counting on one anytime soon.
Soybeans – Soybeans didn’t have near as bad of a day as corn but closed in the red nonetheless. May beans settled a nickel lower at $8.42. The close was 10 ½ cents off the high and 3 ¼ off the low of the day. The bean market was trading in the black for part of the day but the negativity in the corn market was too much to counteract. There wasn’t much for bearish bean news, so the main reason for the lower close…from my vantage point…was spillover negativity coming from corn and wheat. While wheat settled well off its lows, at one time, many of the wheat contracts were pushing 20-cent losses. This bean market has a chance for a positive story, but it’s tough to get anything going with the performance from the corn market. I would imagine the balance sheet USDA works with will be friendly to prices, especially assuming 83.5 million acres. However, IF we see a corn carry posted in the May S & D report above 3 billion bushels, even beans are likely to struggle to rally. Our best advice on beans is to sell some when you know it can work for you. It’s a brutal market to try and outguess.
Call us if you want to talk positions or strategy…or simply bend my ear. If you want more information on the markets, be sure to visit my team’s website at https://www.agmarket.net/
Matt Bennett
217-273-1133 – Work
@chief321 – Twitter
matt@bennettconsulting.net – E-mail
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