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Corn Futures, Rain Days Update 05/01/2022

Why the corn futures price is likely to peak the first half of May

The war in Ukraine is old news. The big up-move caused by the start of war was 67 days ago.

Any major news likely to come from that conflict will be bearish; a truce or end of the war.

The high on corn last year was May 7th.

Corn Belt weather had corn planting progress 8% behind normal a week ago; it will be 12% or more behind normal on Monday’s crop progress report which will support prices through next week as long as cold weather is in the forecast. And then the weather will change for the better.

The bullish March 31st Intended Plantings Report is old news. The market has begun to realize that corn acres for 2022 are increasing. History clearly shows every year that the Intentions Report has a big surprise, the market always balances acreages back the other way.

The closer we get to the June 30th Actual Planted Acreage Report, the more discussion and estimates there will be about a couple million more corn acres than intended in March.

The new crop prices have never been close to this high before the crop is in the ground. A huge number of marginal quality acres will get planted this spring because it does not take much yield to make money with $7 corn and $15 beans locked-in before planting.

The dry weather for Brazil’s safrinha corn crop will end or the damage will be mostly done by the middle of May and fully priced.

Some highly respected Gann cycle and Elliot Wave technicians predict a high the second week of May.

The vast majority of corn normally gets planted in May. That is why they call it normal. Only four years since WWII have a very high percentage of the corn not been planted by June first, namely 1947, 1981, 1993, and 2019.

About half of the Corn Belt’s soil moisture is way below normal and a little sunshine will go a long way toward that soil being ready to plant.

When the planters roll past the 50% planted mark, price will decline and because of great planting weather in May and increased corn acres expected in the June report with decreasing demand, December corn is not going to make new highs.

New crop corn export sales are up 56.7% over a year ago. The USDA projects new crop corn exports will be down 6%. How much more bullish can new crop export sales get?

The EPA just announced Friday that E15 will, in fact, be allowed to be sold all summer. After the market opens tonight, that will be priced-in and old news.

Livestock numbers are declining, hog numbers are down 2% from a year ago, beef cow numbers are way down, bird flu related losses are the second worst in more than 22 years and there are a lot of empty hog barn in Western Iowa due to disease the past winter.

Be ready to price old and new crop corn and buy puts for all of those bushels.


Rain Days Update

The Western Corn Belt has 5 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 1 less rain daysthan yesterday.

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