Crop Progress. The corn crop condition index slipped 4 points this week to 367. The average index for this week of the growing season is 372. Of major corn producing states, those with the highest percentage of crop rated as poor and very poor are Illinois at 14% (up 3% from the week before), Indiana at 20% (+3%), North Dakota 10% (+3%), and South Dakota 18% (+12%).
The Grain Crushings report on June 1 showed 442 million bushels of grain used for fuel in April, 432.75 corn and 9.54 grain sorghum. This is just below the monthly average so far this year for corn of 451 million bushels. For sorghum, 10 million bushels is the average for the current marketing year.
To reach USDA’s projected grain for fuel estimates for the year, a total of about 469 million bushels of grain will be needed each month. The average so far this year is 460 million bushels per month.
USDA lowered 2016/17 grain sorghum food, seed, and industrial use in the June WASDE from 115 million bushels to 110. Corn for fuel was left unchanged at 5.450 billion bushels.
Outside Markets. As expected, the Federal Open Market Committee of the Federal Reserve voted today to raise the target range of the federal funds rate to 1-1¼%, up from a target range set last December of ½-¾%. Economic projections of committee members put the midrange of federal funds rate for all of 2017 at 1¼-1½%, up over 2% in 2018, and up to 3% in 2019 and the longer run.
Even with recent upward movement in interest rates, the federal funds rate is still at pre-recession 60-year lows.
Seasonality. The seasonal pattern for December corn from early March to early June is a sideways pattern followed by what is usually the best pricing opportunity of the growing season. The 2017 contract is following suit. Prices tend to fall off after we know more about acres (June 30 Acreage report) and weather during the precipitation and temperature sensitive silking and tasseling stages. My marketing plan calls for having 40 to 60% of the 2017 crop priced by then.
2017 Feed Grain Marketing Plan. I priced another 20% of the 2017 crop on the weather rally this week. I used as a pricing trigger the point at which the current price dropped below the moving 4-day average. That occurred at 404 on Monday’s trade. My marketing plan still calls for getting another 20% sold before the end of July.
June 23 – Cattle on Feed
June 29 – Hogs and Pigs
June 30 – Acreage; Grain Stocks
July 1 – Registration opens for Master Marketer, brochure available here. Registration opens for TEPAP, brochure available here.