May 10 a date to watch
LELAND, Illinois – May 10 is typically a pivotal date for corn and soybean prices in relation to spring planting progress and this is the year to closely monitor the situation.
It appears that date will come and go with little to no planting progress due to a prolonged wet spell here in the Midwest.
“We also have a good track record of the past couple years of allowing us to have decent yields even though we’ve been planting later,” explained Roy Plote with L&M Commodities.
Plote believes the market is taking a wait-and-see approach before reacting to any weather delays. A new concern down the road could be planting in wet conditions before dry weather sets in.
Some are wondering whether farmers will switch from corn to soybeans or just take prevent plant coverage. Plote read where three to five million corn acres could be prevent plant. Also, the University of Illinois released late planting information which says there is an 80 percent chance of lower yields if most of the crop is planted after May 10.
“That would really start to bite into the surplus, here in the United States anyway.”
Plote hopes the market has found the bottom but there is no guarantee a bottom is in. We could see nearby corn touch $3.35, since there is still a negative bias at this point. Many would like to see a close above $3.75 for July corn. Soybeans took off a dollar in the last few months.
“What are we going to do with this big carryout?” Plote asked. “Until we either get a deal with China or find something else to use up these beans, I’ve been a proponent of protecting the downside for a long time.”
The Illinois River was shut down to barge traffic this week in Plote’s area of northern Illinois. This is causing cash flow issues for those that had grain sold for May delivery. Transporting fertilizer is another concern.
“It’s going to delay any basis improvement because now they’ve just got to get rid of this crop before we can move on,” Plote said.
Livestock took a big hit in the last few trading sessions as cash prices for cattle dropped anywhere from $6-8 and feeders dropped $11 on the board. We may have hit a point where we can consolidate, according to Plote.
“Higher corn prices still kind of weigh on feeder cattle prices. Demand for livestock and cattle is still going up and we are still having great disappearance.”
Plote’s office can be reached at 815-495-2067. The main office for L&M Commodities can be reached at 800-382-0986.