Grain Market Recap
Grain market rally continues for the week and still near highs. Corn is up more than 14% in May, the best month since June 2015. Wheat has jumped 13% in May.
Traders are looking forward to next Monday (June 4) corn planting progress numbers. The latest planting progress reading on May 28 for corn was 49%, well below the ten-year-average of 80%. This year has been the slowest planting progress on record. Analysts estimate there are 47 million acres that still need to be planted.
Can It Effect Grain Prices
Farmers have a big decision in the next few days. They could decide to switch land originally slated for corn with soybeans. Some farmers are considering not planting and filing for insurance payouts. Either scenario could reduce supply and rally prices.Soybeans have not participated as much in rally. They are up only 2% in May. The trade dispute between United States and China continues to be a headwind for prices.
Bear case - Abundance of Latin America supply weighs on market.
U.S. farmers data showing high loan delinquency rates. This comes at tough time when China is targeting U.S. farmers exports in trade war. The price rally and $16 billion aid package that Washington rolled out last week will help farmers behind on loans.
Swine fever has decimated China’s pig herd, and has reduced demand for protein animal feed.