This week your loyal scribe got finished his soybean planting and then promptly turned around and started replanting. It’s never any fun but some destructive rains earlier in the season have caused a lot of crop damage in the area. Hopefully, my next time around everything will go a little bit smoother. Soybeans might be the great liars, but they never seem to like coming out of the ground. Heavy clay helps with the consternation. As I look ahead, I’m hoping for better things.

In the meantime, when I wasn’t pulling my hair out from measured soybean stands, the USDA came out with their latest WASDE report.  The USDA put their new crop corn at 14.86 billion bushels with the yield of 181 bushels per acre on 90 million planted acres the same numbers they had in May. US ending stocks remained the same at 2.102 billion bushels, keeping surprises at a minimum. USDA maintained Brazilian corn production at 122 MMTs and Argentinian production at 53 MMTs.

On the soybean side of the ledger the USDA forecast new crop soybean production to come in at 4.45 billion bushels with an average yield of 52 bushels per acre. This was unchanged from previous reports.  I know I would take that in a heartbeat in my fields at this point, but keep in mind it’s never good to look around in your own backyard and think it is everywhere. It seems like forever now that the USDA has not acknowledged the soybean production problems in Brazil. However, this time around they actually lowered their Brazilian estimate for soybeans to 153 MMTs, which is still far higher than private Brazilian estimates.

We know that wheat prices have saw a big run up but also a big rundown over the last few weeks.  Wheat might be hard to kill which makes it the cockroach of grains, but wheat prices are also hard to rally based on production based almost everywhere in the world. That being said it was significant that the USDA cut Russian wheat production by 1% or 272 million bushels reflecting some of the bad weather seen in Russia which continues to this day.

None of this is very exciting especially if you consider this is the time of year when pricing new crop grain is usually the thing to do. For instance, I always put June 18th on my calendar as the high watermark for new crop corn based on an article written by DTN’s Elaine Kub a few years ago.  That’s about a week away and who knows maybe that date will look good on the selling sheet. However, it would seem that big supply is still winning especially when you look at our stocks to use ratio projections from USDA.

The corn stocks to use ratio released last week from USDA was 14.2% which is unchanged from last month but up from 13.8% last year. On the soybean side of the ledger the stocks to use ratio is 10.4% up from 10.2% last month and up significantly from last year which was at 8.5%. Arguments can always be made that are trading algorithms although they never get tired remembering last week, they might get lazy when the stocks to use ratio is over 10%. Getting good selling prices at these stocks to use ratios is a bit of a work in process.

However, maybe there is hope yet for better prices based on “hot and dry” returning and our historical seasonality. As we head into June 30th all the trading algorithms and the talking heads will be thinking about acreage. Will there be any surprises from USDA sending the markets one way or the other? Will some of the uneven weather that we’ve seen in this springtime across US result in more soybean acres versus corn? Of course, where are those black Swans?

Let’s remind ourselves where new crop prices are in Ontario as of June the 13th. New crop corn is approximately $5.80 a bushel.  New crop soybeans are approximately $14.70 a bushel and new crop wheat is approximately $7.60 a bushel.  Now I can remember times when if I published those numbers there would be a stampede toward selling at the local elevator or terminal.  However, those prices do not get people excited anymore as costs have escalated and many of us have long memories of better prices in the near past.

What you might argue is that the selling opportunity is past for new crop.   However, it might be a bit premature to be saying that especially as we go into the hot days of late June and July. There is likely to be another selling opportunity in the next few weeks and farmers will have to decide what is fair especially for the long-term going into the end of the year. How much risk are we willing to accept? What prices are fair based on the bearish parameters throughout the grain complex?  Will the Canadian dollar finally throw off its funk currently fluttering in the 72 cent US mark, a place that it’s called home for most of this past year.

Expect fireworks in the next two to three weeks as we head into the big acreage report on June 30th from USDA and the July 4th weekend. Is it time to price grain?  Of course, it is and on the other hand nobody really knows.  One old farmer once told me don’t get “too greedy.”  We’ll see what the next three weeks bring.