• The question comes back to how much corn has been planted since May 5, and what are conditions for both corn and soybean plantings now?
Corn plantings the first two weeks of May might have more to do with eventual planted soybean acres than soybean plantings the first two weeks of May.
Only 2 percent of the soybean acres had been planted as of May 5. This compares to 22 percent last year and the five year average of 12 percent. So at this point, timely planting of soybeans is not yet a big issue.
But what may be an issue now, is will late plantings of corn lead to more soybean acres? So the question comes back to, how much corn has been planted since May 5, and what are conditions for both corn and soybean plantings now?
Check out the May 10 USDA/WASDE Supply/Demand update for the 2012-13 marketing year, and their first regular monthly projection of the 2013-14 marketing year.
At this point of the 2012-13 marketing year the soybean crushing projection is probably getting pretty clear, the exports of oil and meal may change some. But the export and residual projections could be much more volatile.
We will wait for any change in the residual projection for the June 1 stocks report. And this one only really matters due to the tight projected ending stocks.
Exports through the remainder of the soybean marketing year, which ends Aug. 31, may remain more of a wild card. The final size of the South American soybean crop, how fast they can get it to their ports, and then out of their ports, will play a large role in our final 2012-13 export figure.
Given how tight projected 2012-13 ending stocks are now, it would be hard for the export figure to go up much, we just do not have the soybeans to export.
Export sales to date, April 25, were 1,333 million bushels, just 17 million bushels below the full year projection of 1,350 with 18 weeks left, although sales dropped 4 million bushels the last week.
Export sales at this point last year were 1,249 and we ended up exporting 1,362 million bushels. So sales would suggest more exports if we had soybeans available.
Export shipments through May 2 were 1,252.4 million bushels, 98 million bushels from the 1,350 million bushel export projection for 2012-13. This would mean we need to average 5.7 million bushels per week over the last 17 weeks of the marketing year.
That should not be a problem. We were exporting 6.4 million the last week in the data, 13.1 the previous week, and 13.1 the same week a year earlier. This all suggests we will meet the projection, but again, how fast can South American get their crop shopped? If it is faster than expected, it could put pressure on our exports.
So what do we do?
For those with old crop left to price, consider pricing portions on July futures rallies towards $14.25-50. We have been trading in the same $13.30-$14.80 range since November. November new crop futures broke out of their November-March range April 1 and don't appear to want to go back to it.
If you have priced little, fall bids are marginally higher than my fundamental would suggest. Are they still?
If November futures have to work to get back to $12.40 or so, that may be a good starting point. If the markets race past $12.40, than watch closely to make some decisions.
On the down side… hard to tell when to bite. How much downside price risk can you take?