Weekly Crop Commentary - 5/3/2024

Wes Bahan
Vice President, Grain Division

Good afternoon. It’s been a wild week for sure. The markets seem to be ending the week working substantially higher. We have several factors contributing to this, but weather is in the forefront. The continued hot and dry weather in Russia has fears of a reduced wheat crop, and flooding in parts of Brazil has harvest coming to a halt there. The fund managers have had a substantial short position in grains, and this is causing them to lift some of that adding to the positivity in the markets. We also continue to have some weather issues here, with some parts struggling to get planting started.

Cash basis this week has been rather steady for corn as ethanol margins remain positive, keeping an aggressive appetite for them. Bean basis is starting to show signs of heating up, as we have seen some spot export business with the weather problems in Brazil. On my travels, I continue to see a lot of planting progress being made, and some have the end in sight. Please remember to have a goal in place and open orders in for those objectives. We are approaching the season where we live and die by the 12-hour forecasts, so what's here one minute can be gone the next. Have a great weekend.

Haylee VanScoy
Director of Grain Purchasing

Well, another wet week has come and gone with more rain on the way next week for a majority of the northern half of the state. The southern half looks to have made good progress this week however. I was down near Circleville and the Chillicothe area yesterday evening and there were lots of planters running in the fields. Rainfall amounts have widely varied, so I imagine we’ve still made better progress than one may think, but we’ll see what the planting progress report has to say on Monday.

The grain market continued to see some follow-through buying overnight but was met with resistance on farmer-selling and a little pre-weekend profit-taking. Overall, still a great week in the green for commodities. I hope that you’ve taken advantage of this rally, if you still have DP to price or old crop sitting in the bin. Make sure to have your target offers in with your local merchandiser to help lock in that profit margin!

Money flow seems to matter more than fundamentals as we end the week, as the funds have been covering their short position. However, it’s hard not to see what’s going on in South America, Russia/Ukraine, and out our own front doors on the weather-front. Increased moisture across much of the corn belt has slowed planting, while flooding in Brazil has risked abandonment and quality issues for the remaining 30% of unharvested beans and 10% of corn. On the wheat side of things, Russia and Ukraine have been struggling with dry weather, which is continuing a double-digit rally on wheat. Next Friday, May 10th, is the next supply and demand report, so we’ll see if they make any revisions lower.

Lastly, don’t forget that Wednesday, May 8th is our final enrollment deadline for the soybean averaging program. Contact your local merchandiser to answer any questions or sign up! This is a great opportunity to market a small percentage of your production during historically price-friendly windows! Hope you all have a wonderful weekend.

Will Gase
Grain Merchandiser, Upper Sandusky (Region 2)

Rain Rain Go Away. It’s Friday, I’ll leave the happy out this week as most here in Northern Ohio would be happier if the rain shut off. Most places got somewhere between 1-1.5 inches of rain this past week with another potential of anywhere between 1-4 inches of rain the next several days. It’s soggy and wet.

With that being said, some folks got a good start on planting last weekend and into Monday, and have been picking fields to plant since then. Others have not started yet.

Prices are reflecting the weather forecast here in the Midwest and the abundance of rain that is leading to flooding in parts of Brazil. That is taking place in areas that there are still crops in the ground, so this is something to keep an eye on, as it could potentially cause a slight adjustment to overall Brazilian production. New crop corn prices are the best they have been since the new year. It might be wise to get some risk off the table and contract a little for the fall. We always talk about weather-market rallies and this might be a small one this week. Take advantage of it while you still can. Stay dry folks and have a great weekend!

Steve Bricher
Grain Operation Manager, Urbana (Region 3)

We are now in Spring planting mode. My wife and I went on a 240-mile ride yesterday evening and saw planters running everywhere that we went. In talking to customers this week, several are almost done with corn or getting remarkably close to being done. I am always amazed at how fast this crop can be put into the ground.

We have seen the markets come to life this week as corn and soybeans are at the best prices that we have seen in at least 3 months. I am trying to decide if we are rallying because it is too dry in the west or that we are going to see rain in the Eastern Corn Belt and never going to get the crop planted. Whichever it is, we will take the rally.

If you have corn or soybeans on DP and are paying storage, this is the opportunity you have been waiting on. We need to pay attention to new crop values as the market is getting close to 5.00 and 12.00 new crop futures. I am a firm believer that if you see these numbers we need to get some new crop grain sold. Whether it is for harvest or for grain coming out of your bins next winter.

The USDA will give us a planting progress report on Monday, so we'll see how much of the crop is in the ground.

Lisa Warne
Grain Merchandiser, Marysville (Region 4)

Good afternoon. The local rain showers this morning have given many a chance to catch their breath after a demanding week of planting. USDA’s progress report through last Sunday had Ohio at 6% planted on corn and 7% planted for soybeans. After this week, locally our completion rate ranges between 60-100%, but I’d say most fall around 75% done.

The market rally, led by soybeans, has spurred some farmer-selling here at the end of the week. Headlines out of southern Brazil say the 7-day rainfall total in the state of Rio Grande Do Sul range from 5-14” in much of the area. Soybean harvest in Brazil is about 75% complete, but that area is a little further behind than that. Another reason for the recent market rally is the Funds continuing to cover their short positions (buying). As was mentioned in our marketing meetings in February, we knew the Funds would be doing this eventually before the heart of the growing season, we just didn’t know when and how much of a bump we would see in the market. We’re starting to get those questions answered now with this fund action.

Don’t forget next Wednesday is the deadline to enroll bushels in the soybean average pricing contract program. Give us a call if you have any questions. Have a great weekend!