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Corn prices favorable despite planting delays

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A market analyst discusses what will be motivating this week’s futures market.

Jim McCormick, senior advisor with Allendale, says the futures market this week will be focusing in on the weather. McCormick makes note of a couple rain events, which could further impede planting progress.

“The planting progress came out Monday evening and showed roughly 17% of this corn crop in the ground. We should be closer to 27% of the total crop in the ground, on a five-year average. We’re a little behind pace. We have a big rain event coming in. We’ll see how long people get knocked out. Statistically, it’s not a big deal yet,” McCormick said.

Allendale research suggests growers tend to see a small yield drag after May 10th. McCormick says the overall yield projection will change, if weather does not allow for sufficient fieldwork within the next 10 days.

McCormick says the futures market is remaining optimistic on another front. He notes trade discussions are starting to point in the right direction, and the market remains hopeful for positive outcomes.

“Trump is sending some advisers over to China to try and work something out. I think the market is a little optimistic that maybe something can get worked out there,” McCormick said. “There’s a lot of signs that NAFTA is getting worked out, which I think you have to be optimistic about. And lastly, Trump is talking a lot about trade, but he’s kind of backing off a little bit – hopefully giving negotiations time to work. He basically delayed all the steel tariffs, for a lot of countries, that were supposed to kick in May 1. He’s delayed it for another month.”

McCormick also makes note of a rather favorable market. He encourages producers without a marketing plan to sell grain now, while prices are advantageous.

“We have some of the highest prices for corn, for fall delivery, in about six – seven months. December corn (is) trading just shy of $4.20. A year ago, corn tapped out at roughly $4.17 ¼. The contract tie for Dec ‘18 corn was made a summer ago, in July ‘17. I’m encouraging producers who haven’t done any marketing – You get up to get some grain marketed and then consider using options as a way to protect the upside, in case we have some weather that drop the national yields down a little bit,” McCormick said.

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