Friday, May 22, 2009

The corn market was higher today and is testing levels not seen since January as the market comes to a better realization of the delicate nature of the new crop corn balance table. The rapid planting pace of the last several days has put some traders at ease but there is awareness that many areas are only just starting to get into the fields with rain forecast for much of Illinois in the Sunday night through Wednesday time period. The possibility of another rain delay for many areas that may only be 50% or less planted could put as many as 500,000 acres of potential corn ground now at risk. There also obviously begins to be discussion of yield potential with such a high percentage of the crop planted after May 15. There has been plenty of discussion of last years planting delays leading to good yields but can this be duplicated? Time will tell.

On the corn demand front there are plenty of questions as well but it is too early to be drastically altering USDA estimates for next year.

The bean market was a mixed bag today as old crop July futures were down $.09 with new cop November gaining a like amount. The July has gained significantly on the November in recent weeks so much of the action today could be termed profit taking but it will be interesting see what happens as we move forward with China still buying old crop beans from the U.S. and new crop acres possibly increasing due to the late corn planting. case in point, China imported 3.7 million ton of beans in April of this year, up from 2.4 a year ago. This type of activity could lend support back to the old crop contracts, something to watch. Locally we have seen a definite increase in producer selling of old crop beans as values reach their highest levels in 10 months.

Have a safe and productive weekend, Phil Farrell