Charts of the Day – June 25, 2019

CZ19 - June 25
SX19 - June 25
WN19 - June 25

Afternoon Market Commentary – June 25, 2019

by: Chris Betz

Corn Soybean Wheat
Old Crop (futures month, change, settle price) CN9 0’6 447’4 SN9 5’4 903’4 WN9 2’2 535’6
New Crop (futures month, change, settle price) CZ9 0’2 457’4 SX9 6’2 926’4 WN0 1’2 557’4

Lower tone Tuesday afternoon with warmer drier weather setting in for the Midwest. Monday afternoon’s crop progress report showed corn 96% planted as of June 23rd, and soybeans 85% planted versus 97% on average. Corn was seen as 56% good to excellent versus 59% the week prior. Soybeans were seen as 54% good to excellent in their first week of crop ratings. Winter wheat harvest is underway with national progress at 15% versus 34% on the five year average.

Trade will also have been pressured by negative comments heading into Friday’s meeting at the G20 between President Trump and Chinese President Xi. The Chinese vice minister of Commerce said the U.S. and China “should meet each other halfway, which means that both sides will need to compromise and make concessions, and not just one side.” A state run Chinese tabloid also said China is prepared for negotiations to fail and the trade war to escalate.

Trade estimates for Friday’s USDA revisions below:

Technical Thoughts – June 20, 2019

By: Ken Lake

This week’s weakness in CME corn futures was attributable in part to the trade’s misunderstanding of how to interpret USDA’s Planting Progress report.  On Monday they reported that 92% of the nation’s corn crop was planted which was significant progress over the previous week’s report.  Most traders, including myself, always took that number as being a percentage of the March 31st intentions.  USDA explained that is not how the number is intended to be understood.  The number they report is a percent of the crop the farmer has planted compared to the number of acres he will ultimately plant.  For example, if on March 31st the farmer intended to plant 200 acres of corn and on June 11th he had decided to prevent-plant 100 acres and only plant 100 acres but only had 92 acres planted he, therefore, would be 92% planted.  Which means that eventually, the nation will get to 100% planted but the final acreage will not be the number we intended to plant on March 31st.

The number of prevent-plant acres will be revealed, partially, on June 28 in the USDA’a Final Planted Acreage report.  The issue with the accuracy of that report will be that not all prevent-plant acres will be reported by farmers by then.  That leaves us to looking to USDA’a monthly Supply and Demand reports for updates.  The last update was June 11th when they reduced acres by 3 million and reduced yield by 10 bushels per acre.  Those cuts reduced the prospective September 1, 2020 carryout from 2.4 billion bushels to 1.6 billion bushels.  The market’s job is to not allow the nations corn surplus to get to zero.  It must price demand out of the market.

So what happens from here?  USDA will likely continue to reduce acres and yield in subsequent monthly S/D reports.  The balance to that bullishness will be the inevitable demand destruction.  We are already seeing that in the form of lagging export sales and the hint of ethanol plant slowdowns.  But in either case, the supply issue is still for the most part unaddressed in the futures market.

I’m not making any sales recommendations.  Look for stronger basis and futures values.

Fertilizer Update – May 1, 2019

By: Emily Calderone

N:
Urea has taken some significant jumps lately. It looks like this is partly due to anticipated demand now that spring is upon us, but also due to the barges that have been unable to move up from the gulf, leading to some areas having short supply. The hope is that prices may come down slightly once movement is happening on the river again.

UAN is slowly creeping up after taking a tumble from the high price we saw last fall – it isn’t uncommon for us to see prices ticking up as applications start happening in the spring but it also looks like CF has pulled their tons off the market again, which is what caused the price spike we saw last summer. There is no word on then they plan to re-enter the marketplace, and there is a good chance that prices will continue to climb as spring continues

P:
Dry phosphate prices have taken a fall at the gulf, and these prices are finally getting passed on to retail purchases as the high dollar supply from last fall is being used up after sitting in storage all winter. If you have an empty storage or a field that needs to be spread, now would be a great time to book some tons.

P (continued):
10-34-00 prices haven’t made much movement lately but as always, supply has potential to be tight, so if you need some to get rolling on your spring planting it would be wise to get things bought. Fertilizer always seems to be harder to find the further into planting we get, but no major price hikes are anticipated due to the dry phosphate market being so low right now.

K:
Potash prices have been stable since January and we likely will see current prices hold through spring. Prices are still not unfavorable in terms of current corn prices and nutrient removals, so if you’re looking to fill up your storage or catch up on the spreading that didn’t happen last fall, it might be wise to get it spread this spring. You will lose some plant available K this season vs if you applied last fall… but you’ll save yourself a headache and keep K levels right if this upcoming fall is as wet as the last one was.

Opening Calls – December 3, 2018 at 7:12 AM

Beans are up double digits after Saturday’s announcement that the U.S. and China have reached a trade truce, and either side will not levy additional tariffs on the other. More work needs to be done to reach a firm resolution to the trade dispute, but the tone should be much more positive moving forward. Beans were up as much as 29 cents at the open of the overnight session Sunday, and currently up 16 ½ cents. Corn and wheat tagging along with corn up 4 ¼ and wheat up 5 ¼.