Marketing

Grain Outlook Corn caught up in wheat’s surge

The following marketing analysis is for the week ending May 20.

CORN – Corn traders returned from the weekend to news that India revised an earlier announcement and had decided to ban wheat exports until domestic prices retreated. This shot wheat prices to limit up and pulled corn prices along for the ride. December corn set a fresh contract high at $7.66.25 per contract as did a few other 2023 contracts. As details emerged, it was noted that government to government wheat sales would be permitted to areas that need food, and for other sales, if letters of credit had been received the shipments could proceed. Once the news was absorbed into the market and the weather turned more favorable for planting, prices PHYLLIS NYSTROM CHS Hedging inC. St. Paul reversed direction and had erased May 16’s gains by midweek.

Risk-off type trading ensued for the balance of the week as poor retail earnings reports slashed equity markets and selling spilled over to the ag sector. Accelerating the mid-week fall was news the United Nations Secretary-General was talking with Russia on the possibility of opening grain exports out of Ukraine and fertilizer exports from Russia and Belarus. Little progress had been made and nothing was agreed to as of this writing. Adding woes to the markets is the fear of a recession from aggressive action by the Federal Reserve to raise interest rates.

Corn planting as of May 15 at 49 percent was as expected, but trails the 67 percent average. Illinois passed the halfway mark with 55 percent planted vs. 70 percent average; Iowa 57 percent planted vs. 80 percent average; Minnesota, with 35 percent complete, was the second-slowest since 2000 and compared to 72 percent on average. North Dakota was 4 percent planted vs. 41 percent on average and South Dakota was 31 percent planted vs. 54 percent on average.

Corn emergence was less than half the average at 14 percent compared to the 32 percent average. The National Weather Service is forecasting high chances for above-normal temperatures for the Corn Belt and below normal rainfall for the western belt (except for Minnesota) for June through August.

The private consultancy AgroConsult cut its

Cash Grain Markets

corn/change* soybeans/change*

Stewartville $7.31 -.12 $16.53 +.84 Edgerton $7.72 +.07 $16.43 +1.11 Jackson $7.87 +.12 $16.50 +1.03 Hope $7.62 +.03 $16.42 +1.03 Cannon Falls $7.36 +.05 $16.70 +1.17 Sleepy Eye $7.62 +.05 $16.53 +1.16 Average: $7.58 $16.52 Year Ago Average: $6.24 $14.82

Grain prices are effective cash close on May 24. *Cash grain price change represents a two-week period.

Brazilian safrinha corn crop forecast by 4.6 million metric tons to 87.6 mmt. Conab’s estimate is 88.5 mmt. The dry weather has been stressing the crop and it’s expected the U.S. Department of Agriculture will lower Brazil’s total corn crop outlook next month. As of May 17, Brazil’s first corn harvest was 91 percent complete and the safrinha corn harvest should begin the first week of June. Argentina’s corn harvest was 44 percent complete vs. 49 percent on the three-year average. Late in the week, Argentina’s Ministry of Agriculture said they may raise the export limit for 2021-22 corn from 30 mmt to 35 mmt. The ministry stated 27 mmt of the 2021-22 crop has already been sold.

Weekly export sales were very good for old crop and slightly disappointing for new crop. Sales for this marketing year were 17.1 million bushels. Total commitments of 2.3 billion bushels are 13 percent behind last year. We need to average 9.7 million bushels of sales per week to hit the USDA’s target of 2.5 billion bushels. New crop sales were 23.2 million bushels to bring total 2022-23 sales to 219.7 million bushels and now trailing last year’s 351.8 million bushels. Last year, China was a massive buyer of corn during this period.

Weekly ethanol production was unchanged for the week at 991,000 barrels per day, but is the secondlowest in the last six years on the same week basis. Ethanol stocks fell 349,999 barrels to 23.8 million barrels. Margins dropped 15 cents to 16 cents. Gasoline demand increased 300,000 bpd to 9 million bpd which was a 14-week high, but is down 2.1 percent from the same week last year. Iowa announced plans to make E15 and other biofuels more available by 2026. The plan includes the number of gas stations offering E15 increasing from 300 to 1000. Retail gasoline prices in the United States hit a record $4.59 per gallon during the week. The average price for diesel fuel set a record at $5.58 per gallon.

Outlook: We’ll continue to expect high volatility in the markets as growers skirt rain patterns and push

See NYSTROM, pg. 17

Financial Focus Fallen tree damage — who pays?

As a homeowner, are you responsible for the damage caused by a tree on your property that hits your neighbor’s home or other insured structure — such as a garage or shed?

In most cases, the answer is “no.”

When such damage occurs to your neighbor’s home due to forces outside your control (e.g., weather events), your neighbors may have to file a claim with their insurer to receive a reimbursement for the damage a down tree or branches cause.

There is one exception, however.

If it is determined the tree damage stems from your negligence (e.g., dead limbs you refused to cut down, or you chose to trim your tree as a weekend project), then the neighbor’s insurer may come after you to recover their loss — a process called subrogation.

You may want to check your policy or speak to your insurance agent to ascertain if your homeowners policy covers your liability in cases of negligence.

When neighbors sue…

Some neighbors may seek to bring legal action against you, though often that is unnecessary.

First, determine what municipal laws are in place to cover such instances. Generally speaking, you are not responsible unless you knew, or should have known, about the danger. Proving what you knew or should have known can be difficult and costly in a court of law. It typically benefits both parties to arrive at a compromise that avoids an expensive legal process. (Note: The information in this material is not intended as legal advice. Please consult legal or insurance professionals for specific information regarding your individual situation.)

MARISSA JOHNSON

Profinium Wealth Management Advisor

Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Advisory services are only offered by Investment Adviser Representatives.

NYSTROM, from pg. 16

to plant corn. As planting dates get later, it’s difficult to believe we’ll see corn acreage increase at the expense of other crops.

Brazil’s corn experienced localized frost during the week, and we don’t know yet how production was affected. We have another week until Memorial Day and prices may need outside input to push out of the recent ranges. Consolidation-type trade may be expected, but as planting marches on, new crop may feel further pressure. But old crop should find support from local and export demand. Manage your risk and don’t be the only one not to sell something at these elevated levels. Weather and demand will be the headlines, so anything can happen. It may be time to revisit your marketing plan.

For the week, July corn was 2.5 cents lower at $7.78.75 and the December contract dropped 16.75 cents to $7.32 per bushel. This was the third week in a row that July corn had a lower close.

The markets will be closed on May 30 for Memorial Day and again on 20 for Juneteenth.

SOYBEANS — Soybeans broke a six-session streak of higher closes at mid-week when prices dove in response to weak equities, talks between the United Nations and Russia about reopening Ukrainian grain exports and fertilizer exports from Russia and Belarus, and the Fed’s comments about aggressively pursuing interest rate hikes.

Late in the week, soybeans rebounded on Indonesia’s announcement they would lift the ban on palm oil exports on May 23. The ban began on April 28. While the domestic price of cooking oil had not fallen as much as the government had hoped for, storage was reaching capacity and the ban was affecting the 17 million citizens who worked in the palm oil industry. Canada reported China had lifted its ban on Canadian canola which had been in place for three years.

More talk of “stagflation” is popping up. Stagflation Financial Focus

JOHNSON, from pg. 16

Investments are not FDIC/NCUSIF insured; may lose value; are not financial institution guaranteed; are not a deposit; and are not insured by any federal government agency.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SECregistered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. v is defined as a combination of economic stagnation and high inflation along with increased unemployment. The nearby soybean crush was under pressure throughout the week and is well off the April highs as soybean and meal prices have risen but soyoil has tumbled. We saw a new export sale of 8 million bushels for new crop to unknown announced during the week although rumors of additional business swirled in the markets.

U.S. soybean planting as of May 15 was 30 percent complete compared to 39 percent on average. Illinois was 38 percent complete vs. 45 percent on average, Iowa 34 percent complete vs. 53 percent average, Minnesota 11 percent complete vs. 47 percent average, North Dakota 2 percent complete vs. 24 percent average, and South Dakota 15 percent complete vs. 28 percent on average. Soybean emergence was slightly behind normal at 9 percent compared to the 12 percent average.

After a period of no new Covid cases, China is easing the lockdown in Shanghai. This should improve demand for many commodities and eventually get the supply chain moving again. Thanks to the lockdown, no cars were sold in Shanghai last month.

Weekly export sales were well above estimates for old crop at 27.7 million bushels and a seven-week high. Total old crop commitments at 2.175 billion bushels have surpassed the USDA’s forecast for 2.14 billion bushels. New crop sales were near the bottom of expectations at 5.5 million bushels. Total commitments for 2022-23 are 418 million bushels vs. 258 million last year. The April National Oilseed Processors Association soybean crush at 169.8 million bushels was below the 172.4 million bushel estimate. Soyoil stocks were slightly below estimates at 1.8 billion pounds and were at a five-month low.

Argentina’s soybean harvest was pegged at 84 percent complete as of May 20 which is right at the three-year average.

Outlook: Based on corn planting progress, it won’t be a surprise to see additional soybean acres get planted in the Dakotas and maybe Minnesota. U.S. soybeans are competitive with South America for summer business and China reportedly needs to buy soybeans for June through August. We should see additional business. The board soybean crush has been declining and should be monitored to see if domestic processors begin to pull back. It is still profitable to crush, just not by as much. Weather will dominate where we go from here, but demand should provide underlying support on any pullback.

For the week, July soybeans jumped 58.75 cents to $17.05.25 and the November contract rallied 23.5 cents to $15.21.75 per bushel.

Weekly price changes in July wheat for the week ended May 20: Chicago wheat fell 8.75 cents to $11.68.75, Kansas City tumbled 29.25 cents to $12.52.75, and Minneapolis plunged 46 cents to $12.79 per bushel.

The HRW Wheat Quality Tour in Kansas was held this week. The average yield for Kansas wheat was 39.7 bushels per acre vs. the five-year tour average of 47.4 bu./acre and last year’s 58.1 bu./acre. Kansas wheat production was estimated at 261 million bushels compared to the USDA forecast for 271 million bushels. v

Late planting options available

THIESSE, from pg. 15

ance policy, they would have the following options prices this year. Every farm situation is different when it comes to finalizing the decisions regarding the use of the prevented planting option, so it is important for producers to make individualized decisions, depending on the situation and the factors involved. Producers should contact their crop insurance agent for more details on final planting dates and prevented planting options with various crop insurance policies before making a final decision on prevented planting. The prevented planted acres need to be reported to their crop insurance agent. The U.S. Department of Agriculture Risk Management Agency has some very good crop insurance fact sheets and prevented planting information available on their web site at https://www.rma.usda.gov/en/ Topics/Prevented-Planting Late and prevented planting crop insurance options Assuming that producers have an eligible with regards to delayed or prevented planting later than the established Final Planting Dates (listed earlier): Plant the insured crop during the late planting period — which is typically 25 days following the established Final Planting Date for a given crop. (Example: A Final Planting Date of May 31 for corn results in a late planting period from June 1-25.) The crop insurance coverage is reduced by 1 percent for each day after the final planting date for the next 25 days. For crops planted after the final dates for the late planting period (June 19 or 25 for corn), crop insurance coverage is set at a maximum of 55 percent of the original insurance guarantee. Plant another crop (second crop) after the Final Planting Date — For example, soybeans could be planted on intended corn acres after May 25 or May 31. In that case, there would be no prevented planting coverage eligibility for the corn acres, and Revenue Protection or Yield Protection crop insur- See THIESSE, pg. 18