Marketing

Grain Outlook Corn market hit short-term bottom?

The following marketing analysis is for the week ending May 27.

CORN — After a higher start to the week, July corn moved to lows not seen since mid-April by midweek. December corn also retreated but managed to stay above the early May lows. The latter half of the week saw corn recover and post just small losses for the week.

Planting progress made great strides in the week that ended May 22 with corn planting at 72 percent complete. By May 29, planting is expected to hit 90 percent complete vs. 87 percent on average. With the crop insurance date either passed or very close in the upper Midwest, it PHYLLIS NYSTROM seems unlikely we’ll add corn CHS Hedging inC. acres in this area over what has St. Paul been expected.

A negative to the corn market this week was the announcement that China and Brazil had reached an agreement for China to import Brazilian corn. There was chatter the deal was made some time ago but was just announced this week. There are still some GMO issues to be worked through and any deals may not actually happen for a few months. However, there was also talk that China had purchased 1 million metric tons of Brazilian corn before the announcement. There’s no confirmation to that either. In the end, the United States and Brazil will probably trade some export customers back and forth. However, we like to see the big Chinese purchase announcements vs. several small sales.

Adding volatility to the markets was the geopolitical posturing of Russia. The United Nations is working on an agreement to create a corridor for Ukrainian grain shipments out of the Black Sea. Russia has signaled they may consider it, but they want concessions that the West is unlikely to grant. Russia wants Ukraine to repair port facilities and demine the Black Sea. They also want the West to remove financial and export sanctions imposed after Russia invaded Ukraine. Russia blames the West for creating the critical food situation. There is an estimated 20 mmt of grain stuck in Ukraine which supplies 10 percent of world wheat exports, 14 percent of world corn exports, and 50 percent of world sunflower exports. Ukrainian officials stated they have enough stored grain to meet both domestic and global demand through 2022 and possibly into 2023.

Cash Grain Markets

corn/change* soybeans/change*

St. Cloud $7.29 -.47 $16.53 .00 Madison $7.39 -.48 $16.23 .00 Redwood Falls $7.49 -.42 $16.50 +.17 Fergus Falls $7.24 -.47 $16.33 +.05 Morris $7.43 -.48 $16.20 -.13 Tracy

$7.50 -.38 $16.40 +.12 Average: $7.39 $16.37 Year Ago Average: $6.67 $15.49

Grain prices are effective cash close on May 31. *Cash grain price change represents a two-week period.

SovEcon estimates Ukrainian corn production at 27 mmt for this year vs. 42.1 mmt produced last year (pre-war). The U.S. Department of Agriculture is forecasting Ukrainian corn production at 19.5 mmt.

The USDA announced this week they would allow growers in their final year of the Conservation Reserve Program to request voluntary termination of their contract following the end of the primary nesting season for 2022. Voluntary participants who are approved will not have to repay rental payments. FSA offices will be mailing information to growers with expiring acres. Producers will have to request the termination in writing.

Planting progress as of May 22 was 72 percent complete which was better than the 68 percent estimate and was approaching the 79 percent average. Planting in Minnesota was 60 percent complete vs. 86 percent average, Iowa at 86 percent complete vs. 89 percent average, and Illinois caught up to their 78 percent average. North Dakota was a minimal 20 percent complete vs. 66 percent, South Dakota was 62 percent complete vs. 71 percent average, and Nebraska was 85 percent complete vs. 88 percent average. U.S. corn emergence was 39 percent compared to 51 percent on average. A well-respected consultancy estimates prevent plant acres may hit 5 million acres, up from its previous forecast for 2.6 million prevent plant acres. They expect planted corn acres at 90.5 million acres which is 1 million higher than the USDA outlook.

Weekly export sales were a marketing year low at 6 million bushels, bringing total commitments to 2.3 billion bushels. This lags last year by 14 percent. We need to average 10.1 million bushels of weekly sales to ring the bell on the USDA export forecast for 2.5 billion bushels. New crop sales were 2.3 million bushels. Total new crop commitments are 222 million bushels vs. 576 million bushels on the books last year.

Weekly ethanol production was up 23,000 barrels per day at 1.014 million bpd. Stocks fell 100,000 bar-

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

rels to 23.7 million barrels and the lowest since January. Ethanol margins improved 7 cents to 23 cents per gallon. Gasoline demand dropped 229,000 bpd to 8.8 million bpd as the average price of regular gasoline in the United States this week hit a new record of $4.60, up 51 percent from last year.

Outlook: U.S. corn planting has made great progress and early June weather looks favorable for crop development. Funds took off a portion of their length this week despite uncertainty in Ukraine, U.S. crop size, and inflation fears.

Corn finished the week on a strong note as traders realized the possibility of Russia allowing grain to be loaded out of the Black Sea is minimal. There were rumors during the week of China buying September corn, but there hasn’t been any confirmation. U.S. weather for crop development, the ripple effects of the war in Ukraine, demand, and money flow will all figure into where corn prices trend from here. Residual effects from the wheat market are also likely to influence corn.

Technically, July corn should find next support at the $7.55 level and December corn at $7.00 per bushel. The market may have found a short-term bottom as the market evaluates weather and political events. We have a lot of growing season ahead of us so manage your risk as it fits your situation.

July corn was 1.5 cents lower for the week at $7.77.25 and December corn was down 2 cents at $7.30 per bushel.

The markets will be closed on June 20 for Juneteenth.

SOYBEANS — Soybeans were an enigma this week with sideways to lower trade in the first half of the week as weather allowed for planters to roll; but huge fund buying emerged to post a 45-cent gain in old crop and 32 cents in new crop on May 26. Fund activity has been a teeter-totter with buying one day

Financial Focus

then selling the next and May 26 was a “buy” day.

July soybeans on May 27 traded to a record-high close for that contract at $17.32.25 per bushel. The new contract high for July soybeans is $17.44.25 per bushel. November soybeans missed setting a new contract high this week by just 3.25 cents. It’s current contract high is $15.55 per bushel.

Brazilian soybean values and world vegetable values were surging higher which spilled over to soybeans. This would suggest export business was being done somewhere, but there has not been any confirmation that it happened. Soybean cash basis remains strong despite board crush margins that are still very profitable but have fallen to their lowest since September and are half of what they were a month ago.

Referring to the China-Brazil deal above, there was also talk that they are working on a meal and soyoil export deal. U.S. weekly export sales were at the low side of expectations for old crop and as expected for new crop. China canceled 4 million bushels of old crop purchases. Old crop sales were 10.2 million bushels and the second-lowest of the marketing year. Total old crop commitments at 2.185 billion bushels have surpassed the USDA’s target of 2.140 billion bushels but are still 3 percent behind last year. We’ll look for the USDA to raise old crop exports in the June report. New crop sales were 16.2 million bushels. New crop total commitments are a record 434.2 million bushels for this time of year. Last year we had just 267 million bushels sold for new crop.

U.S. soybean planting as of May 22 was 50 percent complete compared to 55 percent on average and 49 percent expected. Minnesota’s soybeans were 32 percent planted vs. 68 percent on average, Iowa was ahead of average at 69 percent complete vs. 67 percent on average, and Illinois also raced ahead to 62 percent planted vs. 57 percent on average. North Dakota was barely started at 7 percent complete vs. 47 percent average, South Dakota 34 percent complete vs. 47 percent on average, and Nebraska 72 percent complete vs. 69 percent on average.

U.S. soybean emergence was not reported.

Indonesia lifted its ban on palm oil exports with their storage close to overflowing, according to reports. The ban was in place for three weeks before it was lifted May 23. Exports are not unrestricted. However, producers must sell some of their production domestically to help limit price increases. Russia announced they will not lift the ban on sunflower seed exports when it expires at the end of August.

Argentina’s soybean harvest as of May 26 was 91 percent complete vs. the three-year average of 90 percent. Its corn harvest was 47 percent complete vs. the three-year average of 53 percent.

Outlook: Old crop inverses suggest business getting done somewhere and highlights the snug situation in old crop stocks. Some processors have already rolled their bids to the August and basis levels in the eastern Corn Belt are extremely strong. There was only one announced soybean export sale this week of 130,000 metric tons of old crop soybeans to Egypt, although there were rumors of interest in U.S. and South American supplies. Big daily trading ranges are the norm. The trend is higher until it’s not.

For the week, July soybeans jumped 27 cents to $17.32.25 with a new contract high at $17.44.25 per bushel. November soybeans were 22.25 cents higher at $15.44 per bushel.

Weekly price changes in July wheat for the week ended May 27: Chicago wheat fell 11.25 cents to $11.57.5, Kansas City was 17.5 cents lower at $12.35.25, while Minneapolis rallied 25.75 cents to $13.04.75 per bushel. v

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JOHNSON, from pg. 16

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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

Late planting options available

THIESSE, from pg. 15

to be reported to their crop insurance agent. The 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 preU.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 Revenue Protection or Yield Protection crop insurance policy, they would have the following options vented planting. The prevented planted acres need See THIESSE, pg. 18