Wheat prices holding strong

By Jon Scheve, Superior Feed Ingredients, LLC

Last week:

  • July corn was down about 3 cents
  • December corn was down about 17 cents
  • November soybeans were up over 20 cents
  • July wheat finished the week down only about 10 cents

Planting progress

Farmers appear to be getting a chance at an open planting window this week, which could allow more total acres of corn to get planted. Right now, the price advantage clearly favors planting corn over beans. The market responded this week by pulling back new crop corn prices and pushing soybean prices higher, but the prices still favor corn.

The market is trying to figure out how many corn acres will be planted, especially in the Dakotas and northern Minnesota. With today’s prices, it seems unlikely farmers will take prevent plant over trying to get the crops planted even if it is late.

Soybeans

Increased Chinese bean purchases during a time of year that does not usually see big export numbers likely also contributed to the old crop soybean price bump this past week. Some in the trade think old crop carryout could get tight and prices may need to go higher to ration demand. The old crop rally is also pulling up new crop values to encourage more acres getting planted.

Wheat

Wheat prices exploded last Monday from India’s news on limiting exports. However, wheat finished the week lower as the market perceived the export limits may not be as restrictive as originally thought. Additionally, the Kanas wheat tour reported yield potential slightly higher than the market expected. 

There was news that the United Nations may be brokering a deal to export Ukrainian wheat through Russian ports for humanitarian purposes. There are a lot of doubts that this will happen, but it did raise some concerns for a few market participants and may have contributed to Thursday and Friday’s price pullback.

Wheat in the southern U.S. Plains as well as the crop in France are suffering from dry conditions, while it is too wet in the northern U.S. Plains and Canadian prairies to get spring wheat planted. With these widespread weather issues and Ukrainian wheat still trapped due to the war, wheat prices likely stay strong. High wheat prices should keep corn and beans prices elevated as well.

Final thoughts

For the next few weeks, the market will be focused on planting pace and monitoring weather conditions closely to see how many corn acres ultimately get planted. The market seems to be sensing that a large portion of the corn crop will eventually get planted since the new crop corn values have stayed within a 50-cent sideways trading pattern for the last 6 weeks. Soybean prices moved back to the top end of their recent trading range, which may buy back a few acres from corn at the last minute in the northern states as their insurance coverage planting deadline approaches on May 25. 

Please email jon@superiorfeed.com with any questions or to learn more. Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.

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