Grains took a breather today on old crop months as increased farmer selling, slow plantings, and a slightly different weather forecast put the brake on the recent rally. Old crop corn closed 2 cents lower while old crop soybeans lost 2 cents. New crop corn and bean prices were able to close steady to higher, as December ’24 corn closed unchanged and new crop November ’24 soybeans closed up 8 cents. Wheat traded weaker, with Chicago wheat down 4 to 6 cents, and KC wheat down 10 to 11 cents.
The outside markets were mixed, with gold trading $8 lower and the dollar index was up 0.336 points. The Dow Jones index was 32 points higher, and crude oil was up 9 cents. The latest 8 to 14 day weather maps show warm temps with normal to above normal precipitation for most areas. Rains will need to take a few weeks break to allow for timely plantings, field prep, and spraying to take place.
Grains held small rallies mid-morning which allowed us to make corn, bean, and wheat sales. It is not very often that we sell a portion of all three commodities the same day, let alone multiple crop years. Grains have had a great run over the past week and we felt it was time to take a little risk off the table and price some more grain. December ’24 corn has rallied 31 cents since April 19th, which is a $60+ per acre rally on 200 bpa corn. November ’24 soybeans have rallied 75 cents since May 1st, which is about a $40+ per acre rally based on 55 bpa soybeans. We have been extremely patient on new crop sales, with our last new crop corn sale made 7 MONTHS ago, and last new crop soybean sale made in March! While we would like to wait a little longer to see if the weather rally continues, the USDA report on Friday is more than likely not going to reduce corn and soybean yields or production much, and the corn carryout could be 2.4+ bln and 400+ mln on beans. The threat of new crop corn in the low $4’s is still possible and we can’t rule out new crop beans below $11 by fall. While the market could and hopefully does move higher, we rewarded the market with some sales today. See below for the new advice.
The USDA Crop report will be released on Friday May 10th at 11 am cdt. Trade estimates were released today, and the trade is expecting a 20 mln lower carryout for corn, 1 mln lower on beans, and 2 mln lower on wheat. On 2024/25 yield estimates, the corn yield is expected to be at a record 180.3 while the soybean yield is estimated also at a record yield of 51.9 bpa. Review our commentary from last Thursday here which talked about the May corn yield history.
The trade estimates for South America have a slightly lower tone to estimates vs the USDA. This has been the case for the last several months as many private firms have consistently been below the USDA on estimates. With the recent flooding taking place in parts of Brazil, it is unlikely that the USDA is able to take much of any of that into account on Friday.
MAY CROP REPORT
Last week we touched on corn yield history in May, and here is a quick look at May vs Final soybean yields as well as planting pace as of May 10th. Planting pace for soybeans for May 5th came in at 25% complete, which was up 7% on the week. Since 2007, only 4 years came in above 38% complete for May 10th. Those years were 2021 at 45%, 2023 at 41%, 2020 at 38%, and 2012 at 40%. Record fast planting on soybeans does not guarantee record yields, as 2012 was a prime example of what lack of rainfall can do to the soybean crop. We expect the USDA to print a RECORD yield of 52.0 bpa next week, which would push soybean carryout back to 400 to 450 mln bushels. Mother Nature is throwing a curve ball with some planting delays, and she will have the final say in where the 2024/25 soybean yield comes out here this fall.
USDA Initial May Soybean Yield vs Final Yield and Planting Pace as of May 10th
May est Final Yield % Planted May 10th
2024 – 52.0?? ???? 35%?
2023 – 52.0 bpa 50.6 bpa 41%
2022 – 51.5 bpa 49.6 bpa 17%
2021 – 50.8 bpa 51.7 bpa 45%
2020 – 49.8 bpa 51.0 bpa 38%
2019 – 49.5 bpa 47.4 bpa 8%
2018 – 48.5 bpa 50.6 bpa 26%
2017 – 48.0 bpa 49.3 bpa 21%
2016 – 46.7 bpa 51.9 bpa 27%
2015 – 46.0 bpa 48.0 bpa 31%
2014 – 45.2 bpa 47.5 bpa 18%
2013 – 44.5 bpa 44.0 bpa 5%
2012 – 43.9 bpa 40.0 bpa 40%
2011 – 43.4 bpa 42.0 bpa 10%
2010 – 42.9 bpa 43.5 bpa 31%
2009 – 42.6 bpa 44.0 bpa 14%
2008 – 42.1 bpa 39.7 bpa 10%
2007 – 41.5 bpa 41.7 bpa 22%
An interesting observation on the chart below is that the USDA most recently has been underestimating soybean yields in May. Since 2014, they have underestimated yields 7 out of 10 years. The exception was the wet and late planting year of 2019, 2022, and last year.
Here are some tidbits on yield history since 1995
- Since 1995, the trend yield on soybeans has increased 15.5 bpa, from 36.5 in 1995, to an expected record yield of 52.0 bpa for 2024.
- Lowest yield since 1995 was in the dry August and aphid infestion year of 2003 with a 33.9 bpa yield
- Highest yield since 1995 was in 2016 at 51.9 bpa (5.2 bpa higher than May initial yield)
- The 10 years from 1997 to 2006 the expected trend yield held in a tight range from 38.5 to 40.7 bpa
- The US has never had a final US soybean yield in the 44.1 to 47.3 bpa range
- There have been five years where US soybean yield exceeded 50 bpa
- There have been three years where US soybean yield exceeded 51 bpa
AgriSource New Advice 5-7-24
5/7/24 – Sell 10% old crop corn at $4.72 July ‘24. This will push sales to 65% for the Regular Track and 75% for Aggressive Track (Unable, July ’24 closed at $4.67)
5/7/24 – Sell 10% new crop corn at $4.90 Dec ’24 or $5.01 Mar ’25. This will push sales to 20% for both Reg and Aggressive tracks. (DONE 5/7/24)
5/7/24 – Sell 10% new crop soybeans at $12.25 Nov ’24 or $12.35 Jan ’25. This will push sales to 25% for both Reg and Aggressive tracks. (DONE 5/7/24)
5/7/24 – Go to 100% priced on old crop wheat at $6.50 July ‘24 futures. Currently 85% priced. (DONE 5/7/24)
5/7/24 – Sell 10% new crop 2024 wheat at $6.50 July ’24 futures. This will push sales to 50%. (DONE 5/7/24)
Keep your consultant updated on your planting progress and crop conditions in your area.
That’s all for today. See you here tomorrow
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