May 11, 2024

Is It Time to Sell Some Corn and Beans?

After a couple good weeks in the grains, along with short covering and some planting delays, it’s easy to get bulled up and excited about even higher prices to come.

To temper that enthusiasm, it’s useful to read less-bullish opinions, too. Tom Barry, an advisor with Advance Trading, wrote a good article this week in Farm Futures reminding us that market direction is difficult to predict, and current prices are quite attractive compared to those in March and April.

He suggests buying puts to put a floor in prices while leaving cash sales open to benefit from any price increases, or selling cash and buying a cheap “courage call” to capture potential upside in the next couple months.

Crop Price Changes for the Week

• July corn +9-4

• Dec corn +9-2

• July beans +4

• Nov beans +4-6

• July wheat +41

Large Speculators Greatly Reduce Their Net Short Position

The most recent Commitment of Traders report showed Large Speculators (the bottom green line above) reduced their net short position from 143,000 contracts to just 31,000 contracts. That short covering likely drove the big price gains in the first week of May. Soybeans saw a similar reduction.

Weather - Severe Cold Damages Russian Crops

Temps dipped down to a low of 23 degrees F for two nights in areas of Russia in early May, and officials say up to 650,000 acres of crops may be dead or severely damaged. Full story from Reuters.

5-Day Rain Accumulation Forecast - May 11-16

An Interesting Idea for Battling Weeds on Field Edges

Brian Hefty from Ag PhD says on his farm they’ve been coming back to spray only the field borders in corn at V1 for 30 years now. The weed pressure is heaviest around borders and waterways, so they fill up the sprayer but only turn on the outside section of the boom, which means they can cover a lot of fields on one fill-up and do the whole operation in a day.

He feels the ROI is good because those outside rows can yield very well due to extra sunlight. Video clip here.

Quick Fact: U.S. vs Brazil - Corn and Soy Yield Averages

While the US and Brazil have nearly identical yield averages in soybeans, the US corn yield average is about 90% higher per acre than Brazil’s.

Machinery: Inventory Up, Sales Down, Prices Declining

Reuters talked with ten Midwestern equipment dealers who confirmed rising machinery inventories and poor sales, likely due to falling crop prices and high interest rates. A dealer in Wisconsin said his inventory has risen 30% since last year. Read the full story here.

Sustainable Aviation Fuel (SAF) - Key Numbers

• 1.65 = gallons of SAF that can be made from 1 bushel of corn

• $1.25-1.75 = credit per gallon SAF refineries will receive for 2024

• 3 Billion = proposed gallons of SAF per year by 2030

• 8% = percent of corn acres that are currently preceded by a cover crop (per USDA)

• 5 = major airlines that have pledged to use SAF to some degree, including Delta, United, American, and Southwest

SAF can also be made from other inputs, including cooking oil, animal fat, and forestry waste.

Not Quite Real News - This Week’s Top Story

Innovative farmer installs GPS and autosteer on his riding lawnmower.

Jerry Lang, of Lansboro, MN, said “After getting used to autosteer in my tractor, it felt very unnatural and labor-intensive to steer my lawnmower for an entire hour. With these new upgrades, I am now making perfectly parallel stripes, and it only cost me 12 grand.”

A note from the author

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