Closing Market Comments May 25, 2022

Today’s Prices

Grain prices finished mostly a little bit lower today, but they recovered significantly after a bearish story regarding Russia opening a grain corridor sent markets sharply lower early in the day.

Grain Market News

Weekly Ethanol Production

Ethanol production was steady or higher now for the 5th week in a row up to 1.04 million barrels per day.

That’s still a little below the level needed but certainly is getting closer and we believe that ethanol will continue to increase in its weekly production seasonally as we move through the June-July timeframe.

Total ethanol production through the first 9 months is up 8.2%, USDA is projecting that corn use for ethanol will be up 6.8%.

Weekly Stocks of Fuel Ethanol

Our stocks are down, we continue to trend lower and stocks now the lowest since back in January.

The reason we believe that stocks will continue to decline is that ethanol is currently priced over a $1 per gallon cheaper than gasoline which will continue to encourage additional ethanol blending.

Grain Market News

Crop Insurance

Final crop insurance planting dates for corn full coverage for most of North Dakota is today May 25th.

Soybean crop insurance days are later, we have until June 10th, but spring wheat crop dates are May 31st for the bulk of North Dakota.

U.S. Prevented Plant Acres

Last year we had near record low prevented planting at about 1.3 million acres.

We believe that the planting intention report, which was the survey sent out in mid-February and to be returned by March 1st, most farmers at that time were planning to plant almost all acres similar to last year and therefore we believe that most were looking for prevented plant similar to last year at 1.3 million acres.

If weather doesn’t start to cooperate more favorably in North Dakota this number could still work higher.

2019 Prevented Acres

2019 had a record year of prevented planted acres at 19 million acres of corn, bean, and wheat.

This year we are projecting 4.3 million.

World Wheat Carryout

When we look at the world wheat carryover situation both stocks as well as stocks use and take away Chinas ending stock it shows that we are extremely low with global wheat stock and stocks to use.

US wheat prices appear to be somewhat high, but we need to keep in mind it’s a global market and global stocks of wheat outside of China are near record low.

U.S. Radar

We have additional rain falling in the plains today, that continues to be a slow, soaking rain that is benefiting crop land in the plains.

Unfortunately, some of that rain is moving to the north and east and affecting areas that don’t want rain.

Rainfall in Nebraska, Iowa, northern Illinois, southern Minnesota, and northern Missouri are areas likely to welcome the rains.  

7-Day Observed Precipitation

The past 7 days we’ve seen some areas that have not gotten a lot of rain.

Most of South Dakota, northern Nebraska, southwest and central Minnesota, as well as pockets in Iowa, northern Illinois, and southern Wisconsin have all had less than a half inch of rain.

7-Day Precipitation Forecast

Rainfall that is projected to come in over the weekend for North Dakota, adjacent areas of South Dakota and Minnesota is what we are keeping an eye on.

If this forecast is correct and over the long holiday weekend, we get 102 inches of rain in North Dakota that will increase the situation in North Dakota causing prevented plant to be a bigger issue.

Temperature Outlook

Cool temperatures in the 6-10 and 8-14 day and above normal precipitation in the 6-10 and 8-14 day in the northern plains.

These temperatures and precipitation will cause more problems in the north.

The heart of the belt could be relatively warm and wet in the 6-10 day and then normal temperatures and normal precipitation in the 8-14.

July Corn Chart

Corn prices made a new low for today keeping the overall trend downward.

Today’s low at 7.55, but we did turn around and close at 7.72 which was very close to the daily high and 17 cents off the daily low.

This market could easily move into overhead resistance with a little friendly news.

July Soybean Chart

Soybean prices made a new low for this move today down to 16.65 but recovered 16 cents off the low at 16.81.

Overall, the charts still are indicating a short-term downtrend with the technical indicators down as well.

July KC Wheat Chart

Wheat prices also bouncing off the lows, today we made a new low at 11.92. Prices turned around and close at 12.33 that is 41 cents above the daily low.

The chart is still pointed downward but the big reversal off the lows this morning is a hint that maybe prices got cheap enough as we got close to chart support.

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