Weather Forecast

Close

opinion

Erin Brown/Grand Vale Creative

U.S. farmers' planting intentions dominate market

The U.S. Department of Agriculture released two of its biggest reports this week. The first is the Quarterly Grain Stocks report, which tracks physical supplies of major commodities. The second is the Prospective Plantings report, which is a survey-based report. It reveals farmers' intentions for the upcoming planting season.

Expectations ahead of the reports were for soybean acres to increase from 2017 while corn area would basically be unchanged. Both were lower than expectations and lower than a year ago. As a result, the market rallied, even with bigger than expected corn and soybean stocks. The market is now poised to look at weather and actual planting progress into the spring.

Wheat

Minneapolis wheat markets were weaker even with a rally for Chicago and Kansas City contracts. Looking at the USDA reports, quarterly stocks were not a big story. The report listed 1.494 million bushels held in stocks, just 4 million bushels below expectations. Planted area was up, however. Total area for wheat should reach 47.3 million acres. Spring wheat really surprised the market, with 12.6 million acres expected to be planted. This was well above the market's expectations ahead of the report (average estimate was 11.5 million acres). This prompted a decline for Minneapolis futures despite the rallies for Chicago and Kansas City. The wheat quarterly stocks figure was just 4 million bushels off from expectations, making the market largely overlook that report.

Durum

Durum markets remain weak. The USDA reported lower durum planted area expectations for 2018. Farmers are expected to plant 2 million acres in the U.S., a 13 percent drop from 2017. This drop is taking place despite higher area for other spring wheat. There just has not been very good returns to farmers for durum compared to other spring wheat varieties.

Canola

The canola market continues to be a market follower. The Canadian planted area expectations will be released later in April, but current forecasts call for increased area in 2018. There is a narrative emerging that Chinese demand for canola could increase if soybean trade with the U.S. begins to wane. But for now, the market is well supplied, even with good near-term demand.

Peas and lentils

Pulse area may be lowered significantly in the U.S. in the coming crop year. The USDA showed farmers plan to plant just 908,000 acres to dry edible peas (a 20 percent drop from 2017). Lentils could drop 28 percent in total planted area, falling to 791,000 acres. On the demand side, the Canadian Grains Commission reported February exports showing strong demand from China for pulses.

Mustard

Agriculture Canada is expecting a bump in 2018 mustard seed production from last year's crop. In its most recent forecast, Agriculture Canada pegs the upcoming crop at 145,000 metric tons compared to 122,000 metric tons a year ago. This would occur on slightly lower planted area, as last year's crop was lowered by drought issues in the Prairies.

Barley

Prospective plantings for U.S. barley fell by 8 percent from a year ago. The USDA reported an expected 2.286 million acres expected for 2018. Additionally, quarterly barley stocks were below a year ago, totaling 129 million bushels (an 11 percent dip from last year).

randomness