By Kirk Maltais
--Corn for July delivery rose 0.4% to $7.75 1/4 a bushel on the Chicago Board of Trade Tuesday in reaction to U.S. planting continuing to be behind schedule.
--Soybeans for July delivery rose 0.4% to $15.92 1/4 a bushel.
--Wheat for July delivery were unchanged at $10.92 3/4 a bushel.
HIGHLIGHTS
Slow Pace: CBOT grain futures were higher for most of the day today, in reaction to the USDA's Crop Progress report released Monday. It showed corn planting 22% complete, soybeans planting 12% complete, and spring wheat 27% complete - all well below the average pace from the past 5 years. "The U.S. planting pace on corn and soybeans came in just under average trade guesses," said Karl Setzer of AgriVisor. However, Mr. Setzer adds, next weeks' report is seen as very important - with planting this week expected to accelerate amid improved weather conditions. "Next week's planting progress report may be one of the most watched of the year," he said. "There is a general feel in the market that any corn planted after mid-May sees significant yield drag."
Running Low on Time: Underpinning the reaction to the Crop Progress report were the longer-term implications of what delayed planting means. Weather in eastern growing areas needs to stay dry in order to allow most planting to be complete before the end of the month, or else the national yield may take a serious hit. "In my analysis, a national yield above 175 bushels per acre is unlikely if we see 20% or more of the 3-I States [Illinois, Iowa, and Indiana] and Minnesota still unplanted come May 30," Michael Zuzolo of Global Commodity Analytics & Consulting LLC told The Wall Street Journal. Last year, the national corn yield was roughly 177 bushels per acre, according to USDA data. Farmers planting soybeans and wheat have until June to do so without significant yield impairments.
INSIGHTS
Turning Liquid: The selling seen yesterday may return later this week as wider markets remain bogged down on economic recession fears. Fund traders are seen offloading grain positions in addition to other commodities and equities in their portfolio, said Doug Bergman of RCM Alternatives in a note. "There are signs that funds are liquidating long positions, and while North Dakota, parts of Minnesota, and South Dakota will have delayed planting, the rest of the corn-belt looks to have a window to get crops in," Mr. Bergman said. In its latest report Friday, the CFTC said that funds added short positions in corn and soybeans for the week ended May 3.
Inventory Pressure: Analysts surveyed by Dow Jones this week are forecasting a wide range for potential ethanol stocks. However, analysts are mostly forecasting ethanol stocks to drop - with the range of predictions spanning from 22.99 million barrels to 24 million barrels, versus 23.89 million barrels last week. If inventories drop to below the 23 million barrel mark, it'll be the first time since early January that they've dropped that low.
AHEAD
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
-The USDA will release its monthly world supply and demand report at noon ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
05-10-22 1518ET
