Opening Grain Market Comments - Choppy Grain Prices - Crop only 12 % planted worst since 1984

Markets are called mixed/better this a.m. behind a choppy overnight session and supportive crop progress data last night.

Corn spend most of the overnight session firmer; but when the overnight session paused it closed up ½ cent on the July contract, while December corn was unchanged, KC wheat was up 3 cents, MPLS wheat was up 4-5 cents, CBOT wheat was up 3, and soybeans were up 6 cents a bushel.  Outside markets have a weaker US dollar with the cash index at 82.10, equity futures are pointing towards a positive start of about 40 points on the DOW, crude is off 40 cents, and gold is down 18 bucks an ounce.

A little disappointing to see corn only mustard an unchanged after the beating it took yesterday along with yesterdays crop progress coming in at only 12% which would be the lowest since 1984.  But I guess we will see how things shake out with the pits re-open here in 15 minutes or so.

As for new news this a.m.; not much to report.  We have a crop that is flirting with losing acres and potentially yield; but we still have some open forecasts that might allow for things to move quickly in a week or two. 

One thing the trade seems to focus on is how fast acres can be covered when given the opportunity.  Just look at your own operation; how many more acres can you do in a day versus 5 years ago?  What about 10 or 20 years ago?  How much more efficient and bigger equipment do you have?

Friday we will have an updated USDA Supply and Demand report; with a first look at 2013/14 carryout levels.  Market is looking for very little changes on the old crop balance sheets; while they are looking for a big year over year increase in the US carryout numbers for corn and soybeans; while they are looking for a decrease in the US wheat carryout year over year.  For the world numbers market is looking for an increase across the board for carryout numbers in comparing this present year versus new crop.

One thing that we have to keep in mind is what happens in some of these other countries.  I lot of guys think that if we have more corn we will export more corn; but I don’t know how easy it will be to regain some of that business that we have lost.  It’s not like our competing countries are just going to say go back to the United States we don’t want the export business. 

The export card is also a reason to not get over bulled up on wheat; despite the horrible crop down south and locally.  We still need to export some; keep in mind that for wheat we are typically exporting around half of what we grow.  On the positive side we could easily see some hiccups around the world in the wheat production.  I am hearing some concern in regards to Australia who is presently seeding wheat.

I haven’t seen much for changes in the forecasts that pushed us lower yesterday; but they do get updated numerous times a day; so keep your eye open.  From what I hear one more major system in the heart of the corn belt could push things back close to memorial day for many.  Bottom line is in regards to weather we should expect volatile choppy markets.  One day they can be selling us off because rain makes grain and the next they might run us up because things are so far behind.  Just depends what side of the half empty glass “big money” sees on a given day. 

The one thing that the late planting is opening up is potential fireworks later.  First off late planting opens the door to potential early freeze production and quality loss.  It opens the door to early snow storms that don’t allow for harvest to be complete in Oct/Nov.  It opens the door to high potential of warm/hot and dry weather during pollination.  It also opens the door for old crop tightness; in the past couple of years we seem to have had some new crop early enough that we didn’t run out of the old crop corn.  How tight could things get come August/September/October in some areas? 

Bottom line is the market could look at the present weather and sell things off or they could decide to look at it and run things up; not sure which way they will look at it on a given day.  But the present weather does open up some other cards that potentially give us fireworks later.  That doesn’t mean to get too bulled up; but just realize that things tend to get over done in our markets.  We go up and down more than we probably should on many days.  Stay disciplined but get yourself comfortable and be pro-active as we really don’t know what the next card that mother nature or “big money” will play.  If we did these markets wouldn’t be called future markets.

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