Perhaps it’s the passing of Farrah Fawcett last week – an icon of my youth – that brought up this line, but all I could think this morning as I looked at today’s USDA reports was: “There’s a bear in the air.”
Yes, a Smokey and the Bandit reference. Vintage sometime in the ’70s.
The report is terribly bearish for corn (not so good for barley) and bearish for spring wheat. There’s a bear in the air and he’s shooting at the crops that will be in your bin in a couple or three months.
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USDA found that farmers in the U.S. didn’t in the end reduce their acres, as they had threatened to do in late winter and spring surveys. And weather conditions reported many times as bad for seeding haven’t prevented as much planting as many expected. (See the reports at: http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1000 and http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1079)Â
“It’s pretty obvious that we found a good chunk of the March 09 missing acres,” quipped Frontier Futures in a market commentary.
Prices for corn and spring wheat have fallen off a cliff today. Check out the charts for CBOT corn and MGEX wheat, both nearby and new crop. Ugly. Big gap down and limit-down for corn. The wheat rally that began in April has almost totally evaporated. Oats has dropped back down to $2.04, not too far above the dark days of winter.
What’s the cause of all this wreckage? USDA found U.S. farmers have seeded 87 million acres of corn, which is two million above the March report and three million more than most of the trade were expecting. Spring wheat acres are about 700,000 above expectations and 400,000 above the USDA March report. All wheat acres are about 1.1 million more than expected.
Soybeans have held up better than the other crops, but new crop soybeans are still down midmorning Tuesday by 29 cents to about $9.50 per bushel on fall months and less for later in the winter. Nearby months have held up better because of relatively tight stocks, but that factor doesn’t exist for the new crop months.
The USDA also found U.S. stocks of corn on June 1 are about 100 million bushels more than expected, with wheat stocks about where expected. Soybean stocks are slightly above expectations but not seriously so.
All in all, it’s a rotten way for grain farmers to go into the Canada Day celebrations, if anyone has any time to take off for those. It should be good news for the cattle and hog industries, though, and perhaps that’s the silver lining we can find in the dark clouds that this bear in the air has emerged from. Both have been suffering arguably more than grain farmers – hog producers especially so – and perhaps sharing the pain will help a few make it through a trying and troubling time.
