Chicago corn futures prices tumbled Monday amid news reports showing the likelihood of better growing conditions – at least for the short term, market analysts said.
Planting progress and rain in some key areas of the contiguous 48 states were credited with the price pressure. Weekend rains were better than some expected last week, accelerating the selling through the day.
Also, Brazil’s weather remains dry, further stressing their second corn crop and reducing yield expectations for many investors.
PLANTING AHEAD OF AVERAGE
One thing US farmers are good at is fieldwork if given the chance, an analyst said. Notable progress can be made in planting or harvesting in a short period of time.
Monday, the USDA’s National Agricultural Statistics Service reported that US corn planting was 67% complete, up from 52% in the 2016-2020 average and up from 46% a week ago. However, it was only slightly ahead of the 65% recorded in the same week a year ago.
All 18 corn-growing states were ahead of the five-year average pace for planting except Kansas, which was 54% done versus the average of 55%; Missouri, 69% versus 74%; Ohio, 27% versus 29%; Tennessee, 75% versus 76%, and Texas 76% versus 77%.
Investors expected rapid advances in planting progress, though, and some were said to have taken the opportunity to do some technical selling and long profit taking ahead of the report and ahead of Wednesday’s World Agricultural Supply and Demand Estimates report.
However, corn investors aren’t selling out their long positions, a market analyst said. They’re doing some book squaring ahead of the WASDE report, and the pros likely are hedging their bets on what the USDA will report Wednesday.
CAUTION SIGNS
There are some reasons for investors to retain some caution about corn prices, however, the analyst said. NASS reported soil moisture for the lower 48 at 55% good and 11% surplus. This compares with last Monday’s reported 55% adequate and 8% surplus but falls behind last year’s 67% adequate and 13% surplus.
The weekly US Drought Monitor from the National Weather Service and the National Oceanic and Atmospheric Administration showed almost the entire western half of the contiguous 48 states to be abnormally dry, at least, with vast portions of the Southwest to be experiencing exceptional drought. Most of Iowa, the southern edge of Minnesota and Wisconsin, along with large chunks of Illinois, Indiana and Ohio also was listed as abnormally dry to having moderate drought conditions.
What’s more, the NWS does not expect significant rain to fall in the next few days. NOAA’s 8- to 14-day forecast shows seasonally wet weather returning to the Corn Belt with warmer-than-normal temperatures sometime next week.
CATTLE, BEEF RECAP
Fed cattle traded last week at $117 to $119 per cwt on a live basis, down $1 from the previous week. Dressed-basis trading was at $188 to $190 per cwt, down $1 to $3.
The USDA choice cutout Monday was up $3.23 per cwt at $309.11, while select was up $3.49 at $293.76. The choice/select spread narrowed to $15.35 from $15.61 with 49 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The USDA reported Monday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.04 to $1.18 a bushel over the May CBOT futures contract, which settled at $7.48 a bushel, down $0.24 3/4.
The CME Feeder Cattle Index for the seven days ended Friday was $130.15 per cwt down $0.68. This compares with Monday’s May contract settlement of $135.45 per cwt, up $3.72.