Volatility again reigns supreme, lead by the soy complex, fueled by fund money flow. Funds have continued to buy commodities, with occasional profit taking corrections, such as was seen on Thursday.
Planting progress seems to be a story of two Corn Belts. The Eastern Belt has been plagued with wet weather delaying planting. Some areas have reached the critical decision point, corn or beans. This is on top of an already perceived increase in bean acres thanks to the nice soy rally. Here in the Western Corn Belt, planting is nearly complete in most areas, at the very least well ahead of five-year average pace. Locally however, last weekend’s frost event came with mixed impact. Most agronomy sources have indicated the corn should come out unscathed since the growing point was still below ground. This is not to say the corn got hit, growth above ground was hit, and will likely stunt/slow growth. Soybeans however, are another story. It seems the earliest beans planted were emerged prior to the frost, thus destroying the plant. The total of acres needing replanting is not yet determined, but anecdotal evidence indicates a few thousand acres.
While on the surface, fundamentals appear mostly stable, still negative to price. However, there are very early signs of a change in the works. Soybeans have seen basis improve alongside the futures rally, a counter-intuitive move. Cash movement has slowed, but cash demand has increased with improving crush margins for the processor and steady, late season export demand. While unlikely, it is possible these forces will collide to drop carryout in coming USDA reports.
Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.
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CHS – Rochester Grain Team
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