Spring Crop Outlook
May 09, 2022
As I’m writing this, Corn and soybean plantings continue to lag behind average. The latest crop progress report shows corn plantings at 14%, vs. a year ago progress of 42%. Soybeans are just 5% versus last year at 22%. Widespread cold and wet conditions throughout the corn belt have hampered farmers’ ability to get an early or even normal start to planting. These weather conditions contribute to concerns over total corn acreage planting. Producers can plant quickly, with the ten-year average for the most significant week of progress is 25% and the highest week of progress on the record being 42%. The high fertilizer cost is also a contributing factor to an expected drop in corn plantings. The March 31 USDA planting intentions report predicted prospective corn planting at 89.5 million acres, down nearly 4million acres from last year, with soybeans planted pegged at a record level of 91 million acres. If we don’t see a good stretch of weather reasonably soon, we face the possibility of a further drop in actual corn-planted acres.
We have experienced a record run on grain prices and commodities in general. Record prices have been seen for this time of the calendar year this spring, providing good marketing opportunities for producers for old and new crop bushels. Currently, the USDA has corn-ending stocks projected at 1.440 billion bushels, which is a relatively tight 9.6% stocks/use ratio. That leaves little room for lost production due to acreage switches or a drop below trendline yield if we have weather issues. We have seen little in demand destruction, with ethanol plants continuing to be profitable and export partners looming, as the situation in Ukraine could push more export demand to the US in corn, along with potential yield drops in Brazilian corn crop as well.
These factors are shaping up for a lot of volatility in grain prices over the next couple of months, with late corn and bean plantings. With the uncertainty of how large a drop we have in corn plantings and with a relatively tight supply/demand situation, I would expect the May, June, and at least through the 4th of July corn and into July will be leading the way in price swings as the market digest changes. Volatility can present a lot many excellent marketing opportunities for producers. United Cooperative has the tools available for you to capture higher prices and help manage your risk in marketing your grain. With tools such as a standard forward contract, HTA’s, and minimum prices contracts and target offers, your target can be active in the market, so you don’t have to watch the market trade 24-7. Contact a buyer at your local United Cooperative for more information.
We have experienced a record run on grain prices and commodities in general. Record prices have been seen for this time of the calendar year this spring, providing good marketing opportunities for producers for old and new crop bushels. Currently, the USDA has corn-ending stocks projected at 1.440 billion bushels, which is a relatively tight 9.6% stocks/use ratio. That leaves little room for lost production due to acreage switches or a drop below trendline yield if we have weather issues. We have seen little in demand destruction, with ethanol plants continuing to be profitable and export partners looming, as the situation in Ukraine could push more export demand to the US in corn, along with potential yield drops in Brazilian corn crop as well.
These factors are shaping up for a lot of volatility in grain prices over the next couple of months, with late corn and bean plantings. With the uncertainty of how large a drop we have in corn plantings and with a relatively tight supply/demand situation, I would expect the May, June, and at least through the 4th of July corn and into July will be leading the way in price swings as the market digest changes. Volatility can present a lot many excellent marketing opportunities for producers. United Cooperative has the tools available for you to capture higher prices and help manage your risk in marketing your grain. With tools such as a standard forward contract, HTA’s, and minimum prices contracts and target offers, your target can be active in the market, so you don’t have to watch the market trade 24-7. Contact a buyer at your local United Cooperative for more information.
John Ruplinger
Grain Merchandiser
