By Moe Agostino

U.S. corn and soybean planting is near completion and records are being broken.

U.S. corn was 96% planted as of May 21, 2012 a new record for the fastest planting pace ever, breaking the old record at 95% for the same date. Meanwhile, U.S. soybeans were 76% planted, a new record not seen since 2000 when 72% of all U.S. soybeans were planted by the same date.

Corn futures

Corn futures have continued to struggle and have actually moved lower and for the month of May are down 8.7% or $0.55/bushel on continued concerns that the early 2012 planting pace will provide early new crop corn available in August/September of 2012.

New reports that show Brazilian corn is being sold at a $20 to $30/mt discount to U.S. corn. Despite this U.S. fast pace in corn planting, a Purdue plant pathologist is reporting that many eastern Corn Belt fields planted in mid-April have started to show symptoms of seedling blights.

The market’s attention will now turn towards USDA crop progress reports and weather models that can change on a dime. The month of May has been overall dry and breaking new record highs in temperatures across Canada and the U.S.

With crop ratings on corn near record levels at 77% in the good to excellent condition, expect the USDA to lower these numbers in the coming weeks. Weather is catching a lot of attention by traders with northern areas catching good rains for the week ending May 27.

Soybean futures

Soybean futures in the month of May are down 7.8% or 1.20/bushel after peaking at the beginning of May at $15.124/bushel for the nearby 2012 July soybean futures contract.

The record long funds (managed money) decided to use the increased fears and concerns that Greece would exit the Eurozone to take risk off of the table, sell and take profits. With U.S. soybean planting near completion at 80% + the weekly USDA crop progress reports will take on more significance as there are some concerns hitting that soybeans planted in the U.S. are sitting in dry soil.

Precipitation is below normal for the most of the U.S. while the east and the northern states are normal. Soybean futures after taking a pause and should resume higher on continued talk of good demand from China and support from firmer outside markets as Europe tries to get its act together.

Wheat futures

Wheat futures finally got a bid as weather concerns around the globe, including the U.S. FSU, Russia, China and Morocco led 2012 July Chicago wheat futures to jump 22% in one week or $1.298/bushel.

Some experts are now projecting that global 2012/2013 ending stocks would fall to only 100 days worth of use but still higher than the 2007/08 low of 72.5 days on global supply concerns.

2012/13 global production would need to fall by 50 mmt or 1.8 billion bushels in the coming 6-12 months to experience 2007/08 wheat record prices.

An early harvest low prompted the net record short funds (managed money) to cover their short positions and drive wheat prices higher. We have since corrected as the U.S. wheat harvest in Kansas picks up with average yields coming in a little lower than what the 2012 Kansas Wheat tour was projecting on May 3, with average record yields of 49.1 bushels/acre.

Wheat in Kansas, the largest U.S. wheat producer, as of the week of May 21, deteriorated by the biggest ratings margin in 4-1/2 years as dry weather continued to grip the state. The U.S. Department of Agriculture rated 43% of the Kansas crop good-to-excellent, down 9% from the previous week and the steepest ratings decline since November 2007.

It was the fifth straight week that ratings declined for the Kansas crop. The crop’s good to excellent rating has dropped 17 points in two weeks and 26 points since April 15 — when 69% was rated good to excellent.