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Middle Tennessee | OK guys this analysis might suck, but it's better than it used be, mostly thanks to you!
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The USDA chose Friday to say the same thing it said several weeks ago at the outlook conference, that the US would achieve a record corn yield. It’s hard to blame someone for saying something they said they were going to say. Still, last year they showed some acknowledgement of challenging planting conditions, and boy did those pinheads get lucky, hitting the mark even to their ridiculous precision, not just 158, but 158.8 bushels per acre. Guys, it worked! You should have went with it again!
Friday’s yield number is up against current conditions in Minnesota and North Dakota. In each of the last two years, those two states produced 1.7 and 1.8 billion bushels of corn, three quarters of that from Minnesota. This year, Minnesota is ahead of last year’s planting pace, but still way behind the five-year average, and where farmers would like to be at this point. Last year ponds across the continent had to drain and evaporate before farmers could get their tractors through, but once they did, it was quick work. While delays this season are in common with last spring, it may be that the persistent cold this year means that similarities in planting progress obscure dissimilarities in planting conditions and yield implications.
Friday’s reversal down in corn, along with a show of strength by the US dollar, naturally provokes anxiety that big money’s commitment to ags and to corn specifically may be approaching exhaustion. The inability to find a single buyer at $5.25 can’t escape notice. But big money is still way long the grains, and they look to have used Friday to return to their recent practice of heavy spreading soybeans against corn and wheat.
I imagine at least a little more confidence will be needed in planting progress before macro money makes any real retreat. We’re supposed to be done in a couple weeks, so obviously the 8- and 15-day forecasts at this point are critical. With great planting progress in Illinois and Western corn belt already with some rain on top, and some planting windows appearing on the 8-day in Minnesota perhaps, it appears corn may begin the week weak. Last week’s weather, which should be reflected in Monday’s crop report, I perceive neutral to bullish, so I doubt that report will do much to energize buyers beyond holding support levels. But it’s way too early to put too much money on a great crop, with a lot of information around the corner, so I think prices will firm into mid-week and late-week.
Edited by LongKC 5/11/2014 02:37
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Macros and Weather in the Corn Market This Week
