Afternoon Comments 5/2/2013
Thursday, May 2, 2013, 3:31 pm
Submitted by: Kyle Lehman
Markets settled mixed the afternoon with corn 15 cents higher
while beans closed 1 cent lower. Old crop corn led the way higher as planting
delays continue and forecasts showing little relief nearby. Logic would tell you
planting delays would benefit new crop prices more than old crop but not the
case. Why are planting delays benefiting old crop prices? A few weeks ago we
were looking at our carryout of 757 needing to last until harvest and as harvest
gets pushed back our carryout has to last that much longer. Last year tight
ending stocks for corn were bailed out by an early harvest, this year that is
looking far less possible as planting continues to see delays and weather
forecasts calling for very tight planting windows. Once Brazil loads all the
backlogged vessels waiting off their ports it is possible the Southeastern US
could import cheaper corn from South America providing relief to a later
harvest.
Soybeans struggled to remain around unchanged as corn acres
are thought to be switching to soybeans. The majority of the corn acres that
would be lost come from the northern corn belt but some could come from the
Delta where below freezing temperatures have damaged the already emerged corn
crop. Basis and futures could see some pressure as Brazil exported 7 mln MT of
soybeans in the month of April which surpasses the old record by a comfortable
margin. With the record crop finally hitting the market export demand for
soybeans and meal out of the US should come to a halt.
If you are tired of waiting to plant this may be an
option.
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