Market Commentary  05/21/19 3:10:19 PM Printer Friendly VersionPrinter Friendly Version

Tuesday May 21, 2019

CORN
Corn was higher today with futures firming for a seventh straight session. Settlements were near the middle of today’s range with CN finishing 5 ¼ cents better and CZ up 6 cents as corn surged to its highest level of 2019. Commodity funds contributed to the rally as they bought an estimated 12,500 corn contracts as of midsession. They were estimated to be short 180,000 contracts as of yesterday’s close. Markets started higher overnight after yesterday’s crop conditions report showed just 49% of the U.S. corn crop planted, a historically low percentage for the third week of May. Wet weather forecasts added additional fuel to the rally as both near term as well as longer term forecasts are wet for the Midwest. Several inches of rain fell on parts of Kansas and Missouri yesterday and overnight and heavy rains are expected to sweep across Illinois tonight. Rainfall is expected to be lighter the next several days for Indiana and Ohio, but those states have less than 15% of their corn planted and soils remain wet. Forecasts into the first week of June still show the Midwest getting above normal rainfall. Farmers are looking for short season corn varieties to plant but are finding those varieties sold out. The market did come off session highs as the day wore on due to increasing cash sales by both U.S. and South American producers.

Soybeans
Soybeans ended a volatile trading session on the lower side and near session lows with SN 9 ¾ cents lower and SX off 9 ¼ cents. Commodity funds were buyers of an estimated 9100 soybean contracts as of midsession. Early session gains were linked to spillover support from the strong corn and wheat markets and by the slow pace of planting which may lead to lower yields this fall. NASS yesterday estimated U.S. soybean planting to be 19% done compared to the average of 47%. Given the wet soils that are common across the Midwest and the weather forecasts showing heavy rainfall for the Midwest into early June, it appears that progress planting soybeans will be very slow into early June. Soybeans turned lower late this morning after news stories reported that the Trump Administration would soon announce payments to producers of $2.00/bu. for soybeans due to market losses due to the trade war with China. This drove the market lower on fears producers would plant more soybeans due to the payment. However, recent talk has been that any payments would not be determined by 2019 acreage or production, but by prior year(s) production or acreage data.
 
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