Grains tumble on drier planting outlook
A lower day's expected to start this week's grain trade, with overnight prices trending sharply lower for corn, soybeans, and wheat.
As of 7:45 AM CDT Monday, nearby corn is 9 cents lower at $5.49 1/2 per bushel, while nearby soybeans are 16 lower at $15.12 1/4, according to Barchart.com. Nearby wheat is riding corn and soybeans' coattails, trading 5 1/2 lower at $6.90 3/4.
Monday's downturn in prices is based on an extended weather outlook that's slightly more promising for corn and soybean planting to resume at more of a brisk pace in the coming week, according to Commodity Weather Group's (CWG) Monday Ag QUICKsheet report. Weekend rainfall "was less than expected for much of the central Midwest and will offer some extra corn/soybean seeding opportunities in Minnesota, Iowa, and Wisconsin early this week," according to CWG.
"However, a rain event on Wednesday/Thursday will favor the central and southeastern Midwest, with another event this weekend focusing just slightly farther south. A similar pattern prevails from late in the 6-to-10- into the 11-to-15-day as well."
Though this forecast marks a significant improvement over the last few days, when possible planting windows have been punctuated by continued delaying rainfall, farmers say it's not enough to allow much progress, making the market's Monday downturn something of an overreaction.
"Please show me the drier forecast," says Agriculture.com Marketing Talk contributor Pete379, who says conditions in his area of north-central Iowa are still far from optimal for planting.
The slide in prices comes despite two potentially bullish factors in play, says Agriculture.com Market Analyst and options trader in Chicago, Scott Shellady. The lingering moisture is starting to trim estimates for this year's overall crop size, and a USDA World Agricultural Supply & Demand Estimates (WASDE) report on Wednesday could show that this short crop may just be aggravating an already short supply pipeline.
"Well, drier weather forecasts put a cap on things this morning. Expectations for a smaller corn crop can't stem the tide," he says. "We shall see what the government gives us on Wednesday."