With planting progress inching toward completion and early crop development looking good, the prospects for higher corn and soybean prices are not good. When the USDA corn condition report comes out Tuesday afternoon, it is expected to show most of the crop in good condition. While there are some parts of the country where replanting is needed and others where planting still lags, generally the market is bearish and sees no threat to yields, according to market analyst Bob Utterback. He told HAT that the bears hold the upper hand and that the bulls have only a few weeks to turn the market higher, “The bears only have a few weeks to make their case that there is some kind of threat to the crop that will reduce yields and lower production.” He added, while there are some areas of the country where there are crop problems, for the most part there is not enough of a threat to the market to raise prices above technical resistance levels, “That would be $3.95 to $4.05 in corn, and $9.60 to $980 in soybeans is a pretty solid resistance level.”
Without the chance of a rally, farmers are likely to start moving their remaining 2014 crop out of the market to make room to store the 2015 crop, “Farmers have already made the mental decision to store the 2015 crop until next year and wait for the market to rescue them.” He said this decision will have an impact on the bases levels as we move through the summer.
Utterback says, without a weather event this summer, the focus will turn to the possibility of an early frost hitting a late harvest, “If we have a cooler than average summer, this will prompt talk of an early frost. This could become a market factor in late September or early October.” But he gives this only about a 15% chance of happening.