Grain Marketing Highlights

Carl German, Extension Crops Marketing Specialist;

U.S. Row Crop Planting Progress Slowed
Cool and wet conditions throughout much of the Corn Belt has kept planting progress to a bare minimum so far this row crop season. U.S. corn plantings were running 5 percent behind and spring wheat plantings were about 4 percent behind the 5-year average on Monday, April 14th. Although there is still plenty of time to get this year’s corn planted, it will take another week of drying weather before planters can roll in large parts of the Corn Belt. The corn-to-soybean price-ratio has recently favored corn production. General consensus suggests that another 3 to 4 million acres of corn plantings are needed, above the 86 million acres reported in the March 31st planting intentions report. Based upon yesterday’s close (4/16/08 – Dec corn @ $6.25; Nov soybeans @ $12.73) the ratio is currently at 2.08:1, favoring corn planting. The price-ratio needs to bid to 2.5:1 or better before favoring soybean plantings. Some analysts have suggested that a 2 or 3 million acre shift to corn plantings may be more in line with reality when all things are considered e.g., the high cost of growing corn as compared to soybeans.

Weekly Export Sales Report Bullish Corn, Soybeans, Neutral Wheat
U.S. corn exports for the 32nd week of the current marketing year are slightly ahead of what’s needed to stay on pace with USDA’s projection of 2.5 billion bushels to be booked in ’07/’08. For the week ending April 10, 2008 shipments were reported at 36.3 million bushels. Note: actual shipments at 43.8 mb were slightly behind the 45.6 mb needed to be on pace with projections.

U.S. soybean exports, reported at 17.6 mb, were viewed as bullish for the soybean market considering only 2 mb of soybean sales were needed last week to stay on pace with USDA’s projection of 1.075 bb for the ’07/’08 marketing year. Soybean exports are running well above the quantity needed to reach the official export projection before September 1. Shipments of 15 mb were ahead of the 10.3 mb needed to be on pace with projections.

Weekly sales reported for all U.S. wheat at 4.7 mb brings accumulated sales in the 45th week of wheat’s ’07/’08 marketing year up to 1.231 bb. USDA’s projection for export sales in the current marketing year (’07/’08) is currently pegged at 1.275 bb. Shipments at 11.8 mb were well below the 30.4 mb needed to stay on pace with projections.

Marketing Strategy
The price of crude oil hit an all time high of $114.93 per barrel in yesterday’s trading (04/16/08), with the high at $115.00. The U.S. dollar index, marked at 71.64 at yesterday’s close, is within four tenths of its low made on March 17th. We can expect commodity prices to remain extremely volatile in the near term.

A webinar on using Agricultural Options on Futures, specifically, the put option is being planned to air in mid-May. The thinking is that grain marketers will need to consider/use the put option for forward pricing decisions around mid-June to early July for corn and mid-July to early August for soybeans. More details to follow.

For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.

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