Welch on Grain: Corn 95% Planted and in Mostly Good Condition

    Market Situation

    Crop Progress. This afternoon’s Crop Progress report from USDA showed 95% of the U.S. corn crop is in the ground. This is just below the 30-year average of 96% and ahead of last year’s 90%.

    Today’s report also contained the first condition rating of the 2014 corn crop. No U.S. corn is rated as very poor and 76% is good or better. The corn crop condition index is 387 compared to an average early season condition rating of 370.

    Corn Use. Ethanol production in the 2013/2014 corn marketing year continues to outpace last year and the most recent 3-year average. The Energy Information Administration reports that for the week ending May 23rd daily ethanol production was 38.934 million gallons. Since the first of September, average production has been 37.790 million gallons per day. That compares to 34.819 million gallons per day in 2012/2013 and 36.556 million gallons per day for the 3-year average.

    Again using corn marketing year averages for comparison, ethanol stock levels are 11% below last year and 18% below 2011/2012.

    Outside Markets. The Commerce Department reported last week that U.S. GDP contracted in the first quarter of 2014 by $40 billion or 1%. Consumer expenditures, which account for about 70% of the U.S. economy increased $83 billion (+3%), but this was offset by a reduction in business capital spending and inventories of $81 billion, a $6 billion decrease in government spending, and a $36 billion increase in imports over exports. Expectations are for a rebound in GDP in the 2nd quarter back up to 3.5% growth.

    Look for Friday’s employment report to show an increase in jobs of 215,000 to 220,000. The unemployment rate is expected to increase to 6.5% from 6.3% in April as more persons entered the workforce.

    Marketing Strategies

    2014 Corn Marketing Plan. I am 40% priced on 2014 feed grain production. My next sales objective is this month around the time of the Acreage and Grain Stocks reports. The corn market has been under pressure with a normal planting pace, good crop conditions, and a favorable weather outlook.

    Upcoming Reports/Events.

    June 6 – Employment Situation for May 2014
    June 9 – Crop Progress
    June 10 – Short-term Energy Outlook
    June 11 – WASDE
    June 16 – Crop Progress
    June 17 – Consumer Price Index
    June 20 – Cattle on Feed
    June 23 – Crop Progress
    June 27 – Quarterly Hogs and Pigs report
    June 30 – Crop Progress, Acreage, Grain Stocks

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