Planting pace for corn, soybeans is promising Grain Marketing)

(Editor’s note: John Hall is a professional commodities Analyst.)

A strong planting pace suggests suitable weather across the majority of the Corn Belt headed into Memorial Day weekend.
On Monday, May 22, the USDA reported U.S. corn planting increased from 65-percent complete last week to 81 percent.
The five-year average for Sunday is 75-percent complete.
Yes, we are past the five-year average of 75 percent, but two of those years were challenging (2019’s 52 percent; and 2022’s 69 percent) so we might not be that much faster than recent years.
This same report had soybeans 66-percent planted compared to the five year average of 52 percent for this same time.
The chart at the top-right clearly shows soybean planting is well ahead of past years.
The chart should not surprise many of you as improved genetics have increased soybean productivity in recent years.
Improved genetics along with an earlier planting window have pushed yields.
My neighbor planted beans before several corn fields were planted in the area.
Spring wheat planting was reported at 64-percent complete compared to the 73-percent, five-year average in this same report.
Looks like the wheat belt has finally been getting suitable moisture and weather for planting.
The positive planting news has not been positive to the markets.
On May 25, July corn closed at $5.88 while December corn futures closed at $5.20.
November beans closed at $11.79 this same day and July wheat at $6.03.
We should not attribute planting pace as the only negative market influence.
The main challenge in the markets continues to be usage of old crop stocks for corn, beans, and wheat.
In corn ethanol production has lagged with gasoline consumption down. Arlan Suderman tweeted last week that estimate corn use for ethanol for the marketing year to date totals 3.661 billion bushels, down 176 million or 4.6 percent from the previous year’s pace, and 40 million below the seasonal pace needed to hit USDA’s target for the year.
Exports have also dragged. Brazil has offered a better price for most of the spring. Fortunately, the price spread has narrowed. Last week it was reported Brazil’s discount is now at $11 per tonne or $0.30 per bushel. At this time, Allendale estimates the potential miss on USDA’s current whole-year export guess is anywhere from 95-100 million bushels. That said, as usage is reduced, ending stocks are increased which is the main factor driving current prices downward.
If this trend continues, capturing the best local BASIS could provide your upside if you have not forward marketed. I suggest you start a basis notebook now. Take time to call buyers weekly on the same day of the week and time and note the difference in what they are offering and the nearby futures price. Don’t wait until harvest to start and don’t assume your favorite buyer will provide your best basis.
Bean exports have followed corn in a similar pattern. The five-year average volume for soybean exports for this time is 316,668 tonnes. This week’s export report is expected to be below this total. If it is, it will make 16 weeks of low sales. The chart at the bottom-right clearly shows this trend.
On May 19 the Buenos Aires Grains Exchange lowered its view of the Argentine soybean crop from 22.5 million tonnes to 21. This same day Safras Mercado raised their Brazilian soybean crop view from 155.08 to 155.66 million tonnes. The Brazilian government on 5/11 was at 154.8. USDA on 5/12 suggested 155.0. Yes, Australia was dry, but the increases from Brazil made up for their shortfall.
Competition from South America is fierce. I am reluctant to say that I am not sure we can compete as we have in the past. I suggest you listen to a recent webcast entitled: “A farmdoc Journey in Brazil: AgTech and Innovative Farm Practices” presented by Joana Colussi, Gary Schnitkey, Nick Paulson and Eric Morgan.
This group recently traveled to Brazil as part of a research project on technology adoption among farmers, sponsored by the Lemann Center for Brazilian Studies.
The team shared their observations and experiences from visiting the Agrishow, ag technology firms, University research groups, and farms in Brazil’s Center-West region..
The video is research-based, however, there is sufficient applied production information to make it worthwhile. Brazil’s vast growth potential is staggering.
One comment shared that reflects their potential was: How many acres would you be farming if acres were unlimited and land cost was $200 per acre.
It is no wonder they have several 30,000 to 50,000 acre farms.
I also believe that most machinery manufactures make their advertising videos with multiple “big” machines from these farms.
(Note: I research material from Allendale, DTN, USDA, University Land Grants and other credible sources in compiling this article. It is not merely my opinion, but rather a consensus of experts in the trade. Looking for a marketing coach or someone to discuss strategies with? Contact me at jehgrain@gmail.com, or call 410-708-8781.)