Corn futures prices rose 1.5%, primarily with grain traders squaring positions ahead of the long weekend. Despite the rise corn prices finished the week down for the fourth consecutive time, the longest losing streak since the summer of 2020. The selling has much to do with taking pressure off from the speculative surge on record corn export volumes and higher unit values. Total U.S. agricultural exports are expected to improve $7.5 billion to reach a record $191.0 billion.
Longer term corn prices remain underpinned by possible U.S. planting delays and Ukraine grain unavailable for export. Ukraine’s spring plantings are now 98% complete and will drop 25% from a year ago due to the ongoing Russian invasion, per the country’s agriculture ministry. That includes 10.304 million acres of corn.
Corn Futures Highlights
- Corn dipped 0.3% for the week but is up 31% ytd
- July futures firmed 11.25 cents to $7.7625, with September futures up 10.75 cents to $7.4475.
- Preliminary volume estimates were for 179,164 contracts, falling short of Thursday’s final count of 213,070.
- Corn basis bids were largely steady but slightly mixed at a few Midwestern locations on Friday, moving as much as 3 cents higher at an Iowa ethanol plant and as much as 3 cents lower at an Ohio elevator today.
Corn Technical Outlook
Corn rally topped out at the highest since 2012 in Chicago at +1/8 and has corrected back to spit the Tenkan. Major grower and shipper Brazil, the center-west region had a dry April, hampering corn in its final development stages before harvest. U.S crops are just being sown, wet and chilly soils has left the plantings pace at its slowest start since 2013.
“Farmers are in a race against the clock to get their crops in the ground this week, with planting of corn, soybeans and wheat well behind their usual pace. Wet and cool temperatures in key parts of the Midwest have delayed farmers’ planting plans, leaving them days to get crops in the ground before they start to lose out on a bigger harvest. If they don’t, some grain traders say that already high prices for agricultural commodities could rise even more… The U.S. Department of Agriculture said 22% of corn was planted, compared with 50% for the previous-five-year average. For soybeans, 12% was planted, compared with the previous-five-year average of 24%, and 27% of spring wheat was in the ground compared with a typical 47%…”May 11 – Wall Street Journal (Patrick Thomas and and Kurk Maltais):
Ukraine’s spring plantings are now 98% complete and will drop 25% from a year ago due to the ongoing Russian invasion, per the country’s agriculture ministry. That includes 10.304 million acres of corn, 2.292 million acres of spring barley and 466,000 acres of spring wheat.
In France AgriMer reports that 99% of the country’s 2022 corn crop has been planted through May 23. It also notes that 91% of the crop is rated in good-to-excellent condition, versus 93% in the prior week.
The Ukrainian Agribusiness Club estimates that the country’s total grain production will drop nearly 38% this season. That includes corn production sliding 39% lower to 1.012 billion bushels and wheat production dropping 44% to 661.4 million bushels. Ukraine is a significant exporter of both crops.
European Union grain trade association Coceral has slightly lowered its estimates for EU corn production this season to 2.598 billion bushels. That would be a year-over-year decrease of 1.8%, if realized.
A USDA-ERS report shows U.S. corn exports in fiscal year 2022 are now forecasted to improve by $2.2 billion, reaching a new total of $19.1 billion “due to record volumes and higher unit values.
Total U.S. agricultural exports are expected to improve $7.5 billion to reach a record $191.0 billion.
Effect of Higher Input Costs on Farmers
A recent report by the Agricultural and Food Policy Center (AFPC) at Texas A&M University shows higher input prices are having a larger impact on farmers than originally thought.
- Net cash farm income on the representative feed grain and oilseed farms is projected to decline by an average of $534,000 from 2021 to 2022 across the 25 feed grain and oilseed farms.
- Representative wheat farms face an average reduction in net cash farm income of $399,000.
- Representative cotton farms face an average reduction in net cash farm income of $716,000.
- Rice farms face the largest reduction in net cash farm income per farm at $880,000 and a per acre reduction of $442.
Compiled by Joe Outlaw, Ph.D., and Bart Fischer, Ph.D., co-directors of the AFPC.
Commodity Round Up
- Bloomberg Commodities Index rose 2.5% (up 35.0% y-t-d).
- Spot Gold increased 0.4% to $1,854 (up 1.3%).
- Silver gained 1.6% to $22.11 (down 5.1%).
- WTI crude added $1.87 to $114.07 (up 53%).
- Gasoline jumped 4.7% (up 80%)
- Natural Gas surged 8.0% (up 134%).
- Copper increased 0.7% (down 4%).
- Wheat dipped 1.0% (up 50%),
- Corn slipped 0.2% (up 31%).
- Bitcoin fell $480, or 1.7%, this week to $28,800 (down 38%).
- Bitcoin fell $550, or 1.8%, this week to $29,250 (down 37%).
From The TradersCommunity Research Desk