Perspective: Morning Commentary for May 24

By: Arlan Suderman, Chief Commodities Economist

Tue, 24 May 2022, 13:26

Perspective: Morning Commentary

Arlan Suderman

Chief Commodities Economist

May 24 – Monday’s rebound withered in overnight trading, as economic fears popped their head up once again amid a broad selloff in the equities. Yet, the VIX remains near 29, and the dollar continues to sell as well, allowing many commodities to resume their strength for now. The dollar index is trading near 102.0, which is a new four-week low for the greenback. Yields on 10-year Treasuries are trading near 2.81%. Crude oil prices are mixed this morning, after trading lower overnight. Corn prices pulled modestly lower overnight following yesterday afternoon’s crop progress report, while soybeans and wheat pushed higher in early trade.

USDA’s weekly crop progress report showed impressive progress for corn and soybean planting on a national level, with 72% of the corn and 50% of the soybeans planted as of Sunday, down just 7 and 5 points respectively from the five-year average pace. That led to some pressure on corn prices overnight, which had been rallying to start the week on fears that planting delays would become a larger problem. Yes, I was impressed with the 23-point gain in corn planting progress over the past week. Iowa and Illinois are essentially caught up with corn planting, and they are ahead on soybean planting. This tells me that some farmers planted crops in less-than-desirable soils to get the job done. Mudding in a crop can work, as we saw in 2019, but it leaves the crop less able to handle stress later in the growing season if it occurs. But keep in mind that I’ve said repeatedly that I expected the crops to get planted in central and eastern portions of the belt. That now looks likely to occur.

The problem is still focused on the northwestern Midwest – specifically on the Red River Valley north of Fargo. The market typically would not worry itself about lost corn acres in this region, but this is a year when every acre counts. Much of North Dakota’s corn lies within this region, as does a notable amount of Minnesota corn. Yet just 20% of North Dakota corn has been planted, and we’re running out of time. The situation remains fluid, but I’m currently looking at a risk that we could lose 900K acres of corn, and that number could go up, depending on this week’s weather. The good news is that southern and eastern portions of the belt look warmer and drier in the two-week outlook this morning, while things look wetter west of the Mississippi River. The next question is, was USDA’s planting intentions acreage for corn at 89.5 million acres correct? That will continue to be debated. There’s always error in survey sampling. A 1% error makes a big difference. You decrease error by increasing the sampling. USDA has the largest sampling size of anyone in the industry by far. It can afford to do so. It may be wrong, but I still have to put higher confidence in its sampling size until shown otherwise, such as in the June 30^th survey results.

Another concern is spring wheat planting, with just 11% of Minnesota planted and 27% of North Dakota planted as of Sunday. Those two states account for roughly 80% of the spring wheat. We expect spring wheat to be a priority crop for getting planted. In other words, farmers have an incentive to plant spring wheat after the insurance deadline in most cases, even with the anticipated yield drag. As such, some will continue to plant spring wheat through the first week to 10 days of June. It’s possible that we could even see an increase in spring wheat acreage, but we’ll need to see tremendous progress over the next two weeks. There will be windows of opportunities, but the challenges will remain great as well.

Much confusion ensued after Reuters released a headline Monday afternoon stating that the White House is considering environmental waivers for all blends of U.S. gasoline to lower pump prices, citing unnamed sources. That sent gasoline futures sharply lower when the headline hit, but what does the headline mean? Verbiage about waivers in this industry typically means that blenders are released from the requirement to purchase RINS (renewable identification numbers) attached to produced units of biofuel if they fail to blend sufficient quantities of biofuel into the fossil fuels that they sell. That would be expected to reduce profitability for ethanol, and therefore reduce demand for corn, if that is the correct interpretation. It would also be expected to tighten the supply of available gasoline worse than is currently the case. It would reduce the cost of producing gasoline, but the blending of ethanol into gasoline also extends supplies available to the consumer. Corn prices came under modest pressure overnight on the above planting progress data and the waiver rumor, but gasoline prices also remain under pressure awaiting greater clarity. It should also be noted that rail logistics remain a significant problem for the Midwest ethanol industry, making it difficult to move product. June is normally a month when ethanol production is a near full capacity, but that’s not likely to be the case this year.

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Perspective: Morning Commentary for August 6

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Mike CastleThu, 06 Aug 2026, 13:24

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Matt ZellerWed, 05 Aug 2026, 12:39

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Perspective: Mid-Day Commentary for August 4

August 4 – The Dow Jones is absolutely piling on gains today, adding a similar number that led to yesterday’s record, with the benchmark index now nearing the 54k-point mark through mid-morning. The S&P also hit a new record, while the NASDAQ is exceeding both those gains on a percentage basis. The marketplace is optimistic on a U.S.-Iran trade deal, though the proposed resolution is still being “circulated between the parties”.

Mike CastleTue, 04 Aug 2026, 14:58

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