Soybean, corn prices spike

Farm Forum

Both corn and soybean prices have rallied and officials say those rallies are directly related to field conditions and the fact that not as many acres are getting planted this year.

Soybean prices peaked at $10.37 per bushel as of June 30 and were trading lower on July 1. The market high represents a $1.15 per bushel jump since May 26.

Corn prices peaked at $4.31 per bushel as of June 30 and dropped slightly on July 1. The market high represents a 79 cent per bushel rally since mid-June.

Craig Haugaard, grain marketing manager for North Central Farmers Elevator, said the rallies are directly related to wet field conditions that have either prevented planting from taking place or delayed planting.

“Some states are extremely wet and haven’t been planted,” Haugaard said. “There’s a real fear that crops aren’t going to get in the ground.”

In South Dakota, weather conditions went from extreme dry to heavy moisture. Haugaard said some farmers planted when the fields were dry and others delayed planting waiting for some moisture, but those who waited ran into issues getting into the fields because they were too wet.

Ray Grabanski, president of Progressive Ag in Fargo, N.D., said North Dakota has also been wet. Grabanski lives south of Fargo in Kindred, which logged a record 7 inches in May and another 3 inches in June.

“That’s more than half of the year’s rain,” he said.

Other states have been hit harder, though. Haugaard said planting in Missouri and Kansas is significantly behind.

“Missouri is the epicenter,” Haugaard said.

Grabanski agreed.

“Missouri is the state that’s really suffering,” he said. “It’s wetter than any place in the country.”

In a normal year, 94 percent of Missouri soybeans would be planted, but the latest crop progress report from the U.S. Department of Agriculture shows only 62 percent of soybeans in the fields as of June 28.

In Kansas, 86 percent of the soybeans are planted, according to the USDA, which is about 10 percent less than the normal planting progress.

“We’ll see some additional acres not being planted this year,” Haugaard said, estimating that as many as 2 million acres may not get planted.

Haugaard said the immediate benefactor for the recent rallies is the farmer who has soybeans in storage that’s ready for market, but he doesn’t expect the rally to last, if the market responds similarly to previous market rallies that have occurred due to drought conditions.

“Historically, weather markets peak at the Fourth of July,” Haugaard said, referencing markets affected by weather conditions.

Corn and soybean prices both increased on June 30 following the release of the USDA’s report listing the number of planted acres and the grain inventory as of June 1.

Grabanski said the USDA report revealed a crop inventory about 50 million bushels less than expected and there are likely some acres that haven’t been planted due to weather conditions.

Grabanski said market prices have improved recently, but if weather conditions improve, the outlook could change. Farmers in Kansas and Missouri typically have until early July to plant crops, he said, but later planting does affect the yield.

“If we could get two to three weeks to dry out, the outlook could turn around,” Grabanski said.

Grabanski said now, the big question is yield and how the wet conditions have affected seed germination and initial plant growth.

Haugaard said there has been strong demand in South America, which has increased soybean exports and will likely result in stronger exports than the USDA projected this year.

At the same time, Haugaard said, record crop yields have also been noted in South America, and those crops need to find a market as well.

“Late last week we saw Argentina sold a lot of beans to South America,” Haugaard said. “We usually own that.”

Grabanski said international demands always factor into local prices and actually pushed prices down initially.

“Those are underlying factors,” he said. “The main factor affecting prices now is people’s projections on how big of a yield (there will be).”

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