(Farm Week Now) – Planting expectations certainly changed the past six weeks.
And that affected recent price action and could continue to shape the markets moving forward, according to analysts at AgriVisor.
“We are seeing a struggle with the weather here in the Midwest. (Fieldwork) is going to get bogged down,” Dale Durchholz, AgriVisor senior market analyst, said during a webinar. “I don’t think farmers are as anxious about it as the trade is.”
Some traders may have been lulled into a false sense of security by a mild February, which was the warmest on record in Illinois.
“We had an unusually warm February. Farmers were out doing fieldwork,” Durchholz noted. “It had some in the trade thinking more people would plant corn and maybe there wouldn’t be as big of shift (to soybeans).”
Planters have remained in the shed, though, due to wet weather, with more rain chances next week. And some traders subsequently were caught off guard March 31 when USDA pegged record soybean plantings of 89.5 million acres, up 7 percent from last year, with a 4-million-acre drop in corn plantings to 90 million acres.
States with large declines of potential corn plantings include Iowa (600,000), Minnesota (450,000), Texas (450,000), Missouri (400,000) and Illinois (300,000).
Some of the largest increases in prospective soybean plantings by state are in Kansas (950,000), North Dakota (850,000), Minnesota (700,000), Nebraska (500,000) and Iowa (600,000).
Overall, total plantings of principal crops this year sit at 316.9 million acres, down 2.3 million from 2016. The same trend applies for Illinois where total corn and soybean plantings are down by a combined 200,000 acres.
USDA projects total acreage will decline by 933,000 acres for sorghum, 3.4 million for winter wheat, 504,000 for barley and 119,000 for oats nationwide.
“We lost a lot of low-quality acres (that were in production) back in the high-price and high-insurance-guarantee period three to four years ago,” Durchholz said.
The shift from acres of grain crops to soybeans and cotton this year could support corn prices, particularly if planting delays continue.
“We’re going to turn into a weather market soon enough,” said Joe Camp, AgriVisor risk management specialist. “We’re advocating patience for new-crop corn sales. I don’t rule out better marketing opportunities ahead.”
As for the bean market, Durchholz believes prices may dip to a 32-week low before a slight rebound.
“I’d say we’re about at the point where we’re going to get a lift. The demand base under beans is really good,” he added. “If we get close to $10, it’s a catch-up sales opportunity.”
