You are here

3 Big Things Today, May 28, 2020

Wheat Futures Higher Overnight; Corn Abundance Likely to Weigh on Prices.

1. Wheat Futures Higher Overnight on Slow Planting

Wheat futures rose overnight as spring planting is behind its normal pace and winter heading trails the prior five-year average.

About 81% of the U.S. spring wheat crop was in the ground as of Sunday, behind the average pace of 90% for this time of year, the USDA said in a report.

Only 51% of the U.S. spring crop had emerged at the start of the week, well behind the normal 65%, the USDA said.

In North Dakota, the biggest producer of spring varieties, only 70% was planted vs. the average of 88%, the USDA said. Just 32% of the state’s crop had emerged, compared with the normal 59% for this time of year.

Winter wheat maturity also is behind pace. Some 68% of the crop was headed as of Sunday, behind the normal 72%, the USDA said. About 54% of the crop was in good or excellent condition, up from 52% a week earlier but down from 61% during the same week the previous year.

Wheat futures for July delivery gained 2¾¢ to $5.07¼ a bushel overnight on the Chicago Board of Trade, while Kansas City futures added 3½¢ to $4.55¼ a bushel.  

Corn futures were up ¾¢ to $3.21¼ a bushel overnight.

Soybean futures for July delivery fell 1½¢ to $8.47 a bushel. Soy meal futures added 80¢ to $282.80 a short ton, and soy oil dropped 0.28¢ to 27.32¢ a pound.

**
                Subscribe: Apple Podcasts | Spotify | Amazon Alexa | Google Assistant | More options

               

**

2. Corn Supply Expected to Be Abundant This Year, But It’s Not All Bad News

Corn likely will be “abundantly available” in the 2020-2021 marketing year, which likely will keep a lid on prices for some time, Commerzbank analyst Michaela Helbing-Kuhl said in a note to clients.

Global production is forecast at about 1.19 billion metric tons next year, up from 1.11 billion the prior year, the USDA said in its monthly World Agricultural Supply and Demand Estimates Report earlier this month.  

That will push stockpiles to 339.6 million metric tons from 314.7 million, the USDA said.

The U.S. is expected to produce about 406.3 million metric tons of corn, up from 347.1 million the previous year. Domestic stockpiles would then total 84.3 million tons, a jump from the 53.3 million tons forecast for the prior year, the agency said.

Commerzbank said in its note that the increased production will outstrip recovery on the demand side, which will weigh on prices.

But it’s not all bad news, Helbing-Kuhl said.

Oil prices are rising and likely will continue to do so through the end of 2020, she said. Demand from China also is expected to improve.

“The country is apparently planning a substantial increase in its government reserves of corn and is likely to link this to the fulfilment of its obligations under the Phase One agreement with the U.S., which provides for increased purchases of U.S. agricultural products,” she said.

The USDA has pegged Chinese corn imports at 7 million metric tons in the 2020-2021 marketing year, unchanged from the previous year, but up from prior years.

Still, Helbink-Kuhl said, that doesn’t change the fact that there is and will continue to be lots of corn in the world.

“This does not change the picture of a very abundant supply,” she said.

Corn prices likely will hover around $3.50 a bushel in the fourth quarter this year. While that’s not a stellar price, it’s better than today’s price, which is at about $3.20 a bushel.

**

3. Thunderstorms Likely in Much of Iowa and Northern Illinois Thursday

Slow-moving thunderstorms are expected in much of Iowa and northern Illinois today and tonight with rainfall rates of an inch or two an hour, according to the National Weather Service.

The heavy rain may cause flash flooding in low-lying or poorly drained areas, the NWS said in a report early this morning.

A flash flood watch is in effect starting at 7 a.m. for parts of eastern Iowa including the Quad Cities and some counties in Missouri. Isolated rainfall amounts of 4 inches are possible, the agency said.

Farther south in Oklahoma, scattered thunderstorms are likely today, mostly across the eastern half of the state, the NWS said. Severe weather is not expected.

Read more about

Tip of the Day

Agronomy Tip: Balance Nutrients in the Fields

Corn beginning to emerge. Let the 4Rs of Nutrient Stewardship be your guide: the Right source, the Right rate, the Right time, and the Right placement of products.

Talk in Marketing

Most Recent Poll

Will you apply for the Coronavirus Food Assistance Program (CFAP)?