Free Commentary

By: Dan Hueber –

Wet weather may be garnering a little attention in the trade but more so the wet conditions that appears to be slowing the Argentine harvest than potential planting delays in the Northern hemisphere.  Obviously, it has been a wet season from start to finish in Argentina this year as if you recall, acreage did fall short from the excessive flooding in the spring but on the same token, ample moisture has given them the potential for solid yields.  We shall have to see now if those potential yields can find the way in to bins and the marketplace.

The board of directors for the German chemical/pharma company Bayer will not need to be taking any aspirin to relive “acquisition headaches” as its soon to be subsidiary, Monsanto has released solid second quarter earnings.  For the period, they recorded a profit of $1.4 billion, which compares with the same period a year ago at $1.1 billion.  Sales were up 12% to $5.1 billion beating expectations of $4.7 billion.  The gains were attributed to solid growth and profitability in the corn and soybean business. Even though some environmental groups were continuing to protest as recently as last week in Brussels to try stop EU approval of this merger, it would appear that there is little in the way to keep this from moving forward.  It is almost amusing today but I recall back in the early 1980’s when Pfizer, Inc. entered into a venture (takeover) with DeKalb Seed, which of course is now wholly owned by Monsanto, which seemed so revolutionary at the time.  The catch phrase in the farm community was that there would now be a “pill in every hill.”  Of course it was just a taste of things to come as today chemical/pharmaceutical and major seed companies are intertwined and growing more so each and every year.  This coming June will mark 100 years from the incorporation of the DeKalb County Agricultural Association, which later became DeKalb Genetics. Led by farm advisor G.K. Eckhart and plant breeder Charlie Gunn, the mission was to develop high quality seed for local farmers.  I am sure it is safe to say that these pioneers could never have imagined what this industry has evolved into and even more so, controlled by whom, during this past century.

Grain and soy markets continue to struggle just a bit as we move through this first week of the month but I believe still show signs of trying to form a bottom. As you would expect, the combination corn, bean and wheat has fallen well away from the first quarter highs and has returned to base line support.  I continue to believe this represents a point of value for these markets but will eventually need a supply (weather) issues to develop to carry prices into higher ground.