We’ve a long way to go this crop year! It’s anyone’s guess as to what figure the USDA releases for planting progress tonight. The “normal” for this week of the year is 91% planted for corn and 62% planted on beans. We’ve been hearing and seeing corn estimates at 70% +/- 5% and beans at 30%, yet beans are an afterthought as there’s still time! Wheat condition will be interesting as Oklahoma and Texas and Arkansas have been pounded and there was some disbelief last week when the USDA said that the condition improved in hard red wheat states despite the deluge over last weekend. Might be another week of suspension of disbelief with the USDA figures.
Scattered pollination, early frost and other factors are creeping into conversations, too! Also, the possibility of importing South American corn and beans and increased wheat feeding if quality slips. How many corn acres don’t get planted? And, those that do might expect a significant loss in yield potential. Stating the obvious but, things change, just like it did when we were below the cost of production three weeks ago and prudent end users took extended coverage via buying futures and bullish option strategies. Prudent producers might be looking at the opportunities presented in the new crop 2020 and 2021 contracts. These contracts are tools, not toys!
Spreads tightened a bit given the fund short covering in the front months yet, the stories are in new crop corn and beans. Quality is the story with wheat and we have to hope for warmer and drier conditions in the next six weeks to ensure a decent harvest. Millers are on pins and needles right now as the circumstances are lowering protein and falling numbers in those areas where we’ve turned and ready to go. Traders will be looking at the Texas and Oklahoma condition report a little closer tonight.
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