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Ready, set, plant!

Agriculture.com Staff 04/14/2006 @ 8:29am

Planting has broken out in some areas of the Corn Belt and, as might be expected, corn prices have softened a little. Market talk has also begun that 1 to 3 million acres may be shifted to corn, given the recent price strength. It is likely that everyone in the marketplace has a story of farmers changing their plans. Sorting out the gossip from the truth may take awhile!

Even with corn prices 6 cents or so from their highs, there has really not been a break in the market to worry bullish traders. Moving in the opposite direction from corn, there has actually been a small rally in soybean prices. The bigger picture suggests profit-taking in spreads between corn, wheat and beans this week.

The six months of the year to worry about supply issues has begun. Demand issues have taken a back seat to weather forecasts and planting progress. Actually export demand has been slowing in the past weeks, with corn export sales under 1 million metric tons and soybean sales (old crop) at 334,200 metric tons. There was a substantial amount of new crop soybean sales in today's export sales report, but that was known to the market as China had made "goodwill" purchases in advance of US/China talks next week.

For the year, corn shipments are 81 million bushels above year ago levels and soybean shipments are 196 million bushels behind. China is the main force behind both numbers. The pace of corn shipments really picked up after the first of the year when Chinese corn exports slowed, while soybean shipments have been miserable all marketing year, due to declining market share in China and slow sales to the EU. Since the percentage of exports is substantial in the first half of the marketing year, it is unlikely the trend will change.

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

Planting has broken out in some areas of the Corn Belt and, as might be expected, corn prices have softened a little. Market talk has also begun that 1 to 3 million acres may be shifted to corn, given the recent price strength. It is likely that everyone in the marketplace has a story of farmers changing their plans. Sorting out the gossip from the truth may take awhile!

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