Stories about markets
The mixed crop production and supply and demand estimates reports had about 15 minutes of fame before the trade turned its focus toward the weather. Randy Martinson of Martinson Ag Risk Management dissected the U.S. Department of Agriculture’s reports in a Minneapolis Grain Exchange teleconference.
With a few minor tweaks in the U.S. Department of Agriculture’s supply and demand estimates, the trade now turns its focus on weather and the upcoming acreage and grain stocks reports.
During the month of May, U.S. grain prices did a swan dive. Soybean prices fell $1.78 a bushel, corn was down $1.35 and wheat slipped into the red by $1.27 a bushel. The grains were riding high in April, but clearly shot down in May.
The first column I penned for the month of May was entitled “A bull market always lets you in.” The title comes from an old saying about a bull market. It simply means that when a bull market unfolds, try not to buy strength. Be patient. History shows that more often than not a significant decline will unfold that is totally unexpected and allow patient bulls to probe the long side of the ledger.
It will take 12 to 18 months of near-perfect growing weather in the United States for ending stocks of corn and soybeans to rise back to comfortable levels where the threat of “running out of grains” is no longer an issue.
Kansas farmers are expected to harvest a bountiful winter wheat crop this season, according to a government forecast.
China is even hungrier, richer and — to the delight of almost every American farmer — more impatient in today’s global food market than anyone thought possible even a decade ago.
The first new crop balance sheets were penciled in by the U.S. Department of Agriculture and mirror much of what the market has recently seen on the demand side.
The U.S. Department of Agriculture’s May supply and demand estimates report included a first look at the 2021-2022 marketing year along with old crop balance sheet adjustments.
U.S. winter wheat production is forecast at 1.28 billion bushels, a 10% increase over last year. The U.S. Department of Agriculture’s crop production report projects the nation’s winter wheat to average 52.1 bushels per acre, up 1.2 bushels from 2020, based on conditions as of May 1. If realized, this would be the third highest yield on record.