6.17.22 Market Commentary

This week’s action:

Corn July up 12 @ 7.85

Corn Dec up 12 @ 7.32

Beans July down 46 @ 17.02

Beans Nov down 31 @ 15.37

KC Wheat July down 43 @ 11.04

Feeders Aug down .10 @ 173.075

Fats June up 1.925 @ 137.925

July Hogs up 3.30 @ 1010.875

July Crude down 11 @ 109

 

Seasonal Averages:

Dec corn Feb 1 – today: $6.81

Dec corn since Russian invasion: $6.99

Nov beans April 1 – today: $15.08

July KC wheat since Russian invasion: $11.36

**We are about 90% through a typical corn seasonal sales time frame with about 15 days remaining.

**We are about 55% through a typical bean seasonal.

 

Recap:

Old crop corn basis has been on fire with some locations in central Nebraska bidding 15-20 cents higher than early last week. The question everyone is asking – is the farmer too focused on spraying/replanting or is all the corn gone? Time will tell. September corn has trended lower from mid-June to late-July 13 of the last 15 years. Be wary of carrying old crop corn through the summer with no game plan. I would expect the industry to roll bids to the September contract sometime next week. Some pockets of central Nebraska have experienced devastating storm damage over the last week or so. New crop basis looks to be firm in those affected areas until a crop is realized. Soybean futures reached their highest ever level for mid-June last week at $17.84. They have fallen over 80 cents since then. Last year, June 17 marked the high in old crop soybean values, which was quickly followed by a $1.20/bu decline. Rail logistics continue to be a problem for both elevators and processors. Reports of loaded trains sitting at elevators for weeks are starting to circulate.

 

Market focus has moved from Russia/Ukraine to summer weather. The markets are closed Monday in observance of Juneteenth so Monday night’s forecast will have heavy attention.  

It is June 17. Late June/early July is typically when we see contract highs in corn barring catastrophic summer weather.

 

Forecast:

Expect hot/dry conditions to continue into next week. 

 

Outside Markets:

This week began with headlines about crypto currencies and exchanges being aggressively devalued along with much of the stock market. Both the DOW and S&P are down over 3.5% this week. The S&P is down 23% YTD. The FED raised interest rates 75 basis points and indicated they will likely continue raising rates through the summer to combat inflation. The housing market is showing signs of a major slow down as mortgage rates approach 7%. A $300,000 mortgage at 3% is a monthly payment of $1,265. The same value mortgage at 7% is a monthly payment of $1,995 ($730/month or $8,760/year increase). Crude oil had a big pull back to end the week (down $7 today) as rumors of an export ban have been floated from the White House. This decision would not increase our domestic refining capacity to produce gas or diesel. The national gas average has officially reached $5.00/gallon (Nebraska $4.79).

 

Something that Probably Means Nothing:

A 96.3 acre farm near LeMars, IA sold for $2.6 million at auction last week, which is approximately $26,000/acre! Iowa State Extension has the 10-year county corn average at 190.6 bu/acre. Using today’s new crop values with the average yield, it would take 20 years for gross receipts to equal the purchase price.

It was bought by a neighboring farmer.

 

Enjoy your Father’s Day weekend!