Corn Article and Market Report

Jason Bennett
CPS Tangent

Another article on corn, take a read.

Wheat is back up over $8 again through harvest with Nov/Dec at $8.25.  New crop for next year is $7.80, the highest we've seen in a while.  Here's Dan's report:


  Straight north…that’s where the markets are headed today. They opened much stronger and never looked back. Red wheat futures are up 20 to 25, Chic is up 15-20 and corn is ‘tagging’ along. Markets are gaining a ton of weather premium again today. Yesterday’s crop progress showed: corn planted is at 7% vs. 16% last year (8% on the 5 year though). Winter wheat conditions are terrible with only 36% of the US crop G-Ex vs. 69% last year. Ks was down 3%, Okie down 4, while Colo (only place left for them was up) went up 6% and Neb was up 7%. Without a doubt the soft wheats are carrying the biggest % of the winter crop scores. White winter wheat states are rated at 84% G-Ex. Spring wheat plantings are rated 5% vs. 18% last year (not much will get done this week). Biggest spring wheat state (ND) is at zero. The forecast high in the Montana wheat belt this week is: low 40’s. Illinois is seeing record snowfall, just got off the phone, and it is snowing in Nebraska. For the most part, the US will see the same weather patterns in the next 6-10 as we have all year long so far. Depending on who you talk to, locally we are between 2-3 weeks behind ‘normal’ whatever that is.
               Russian plantings are running WAY WAY behind. Their spring plantings are at 50% of last years levels PLUS they have an additional 12.4 myn acres to plant (that didn’t get planted last year). Canada is already 2-3 weeks behind. When your growing season is as short as Canada’s you can’t really afford to lose many growing days. Dry weather in the UK, EU, France, Germany is not quite yet at the ‘critical stage’, but they are warming it up….the news has made it to the stove top, but its still on the back burner. Overnight China sold 4.1 myn bu of feed wheat from their reserves, that makes 12.9 myn bu since last month. So far this marketing year, China has sold an estimated 6 myn mt of ‘milling grade’ wheat and huge discounts to millers, with the requirement that the discounts flow through to the end flour price. Just another example of their on going inflation battle.

  ***Didja Know: The most expensive wedding on record was in Dubai in 1981…at a cool $44myn. Actually there were only 2 people that signed the Declaration of Independence on 7/4/76: John Hancock and Charles Thomson…most of the rest of signatures were added on 8/2, with the last signature added 5 years later. “The older you get, the better you get, unless you’re a banana” Betty White…”The paradox of success is what you where you are, won’t keep you where you are” Charles Handy.

  Markets were called higher, opened up 4-5, set back a tad then snapped to plus 30’s on wheaties and up a dime on n/c corn, which is where we are right now. Export inspection report showed: Wheat; 35.7 myn bu (strong shipment numbers). Puts us at 1.06 byn bu for the year, but with 5 weeks to go in this marketing year, and 214 myn bu to ship to hit USDA numbers, it doesn’t look like we will get there (42.8 myn bu/ week). C/o will grow and then there are always the possibility of cancellations especially as futures surge. Corn shipments were 32 myn bu or 1.077 byn bu on the year. 19 weeks left mean that we need to average 46 myn bu/ week to hit USDA (also not looking good). Any increase in corn c/o will be appreciated by the market though. We continue to watch the o/c, n/c corn spread come together. COT report showed the specs bought corn early and often last week, and increased their positions by 180 myn bu. Weather man says more of the same…meaning: ECB will see rain and snow as far south as Illinois. Midwest will also see rain and snow. Red River has crested, with huge flooding, but no major surprises. Between rain and snow in the upper Midwest they will get 1 – 1 ½” of precip this week…little or no field work will happen, snow could make it as far south as Nebraska. For the S. Plains….no relief. Market is seeing “late spring, slow plantings” which almost always translates into lower yields.
               China raised their bank reserves again (4th time this year) effectively taking another $50byn out of the economy. Wea man says the Yangtze region will get rain, but it will remain dry up north…still no relief for them either. Chinese gov’t will auction off another 15 myn bu of ‘milling’ grade wheat, and in an effort to reduce corn demand (industrial use up 11% vs. lyr), will limit industrial plants to ’09 levels and then charge them a VAT on production. Ukraine has replaced their export quota system with a ‘duty’ system: its 9% on wheat and 12% on corn. Russia says export ban will remain till fall, but MAY consider exceptions earlier. All of this against a backdrop of wheat exports from India/ Paki. Indian/ Paki wheat will likely be low quality, but will displace some demand today. WATCH Europe…we are getting ‘dry’ reports from Euro. This market will be ultra sensitive to any negative weather news.

***Didja Know: Chinese were using aluminum in 300 ad, the west didn’t start using until 1827. About 7,000 couples get married/ day in the US. The ‘average’ wedding costs about $100/ guest.