MarketsFarm — Soybeans on the Chicago Board of Trade (CBOT) are trying to play catch-up in what has become a weather market, according to Steve Georgy of Allendale Inc.
Corn planting in the U.S. was far behind its five-year average due to persistent wet conditions, he said, and that created the scenario of U.S. farmers making the switch to planting soybeans. However, those wet conditions have also made soybean planting difficult.
The U.S. Department of Agriculture (USDA) released its weekly planting progress report on Tuesday, which illustrated how far behind corn and soybeans have become.
Corn was 58 per cent planted, well back of its five-year average of 90 per cent. Also, 32 per cent of corn already planted has emerged as compared to that five-year average of 69 per cent.
Soybeans were 29 per cent planted, according to USDA, with the five-year average at 66 per cent. Only 11 per cent of the soybeans planted have emerged, when it should be closer to 35 per cent.
Wheat, although behind pace, has fared much better, with 84 per cent in the ground compared to the five-year average of 91 per cent. About 47 per cent has emerged, as opposed to the average of 69 per cent.
That USDA report generated emotions overnight, which resulted in a steep jump in prices at CBOT at market open, Georgy said. In turn, farmers began selling cash grain, which created a drop in prices by mid-morning.
“Old-crop was profitable again,” he said, noting even with the drop, farmers were getting good prices.
— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.