Corn market getting biggest bump from late planting
Corn planting in the U.S. is delayed. Very delayed. Historically delayed.
As of May 26th, just 58% of the intended 92.8 million acres of corn had been planted. The five-year average pace is 90%, and even last year (that saw a slow start to planting) had gotten caught up to the normal pace by late May. This delay means that roughly 39 million acres are not yet planted (assuming all of the intended acres are still going to be planted to corn is a big stretch). And weather forecasts suggest more delays. Storms have been raging all week in spots across the Corn Belt, bringing rain and powerful winds that are keeping farmers from planting anything.
The market has responded. Prices have been firming all week with more wet weather. Speculative funds have gotten long, rising from a record short position just a month ago (adding fuel to the rally). Even for areas that have not been suffering from the insane wet weather, the support is being felt.
Yes, wet conditions are impacting other crops and planting efforts. But corn's delay is the most covered, followed, and studied market factor. It impacts what other crops will be planted in its place (with a strong possibility of more soybeans and spring wheat).
Wheat markets continued to move higher, rising with support from corn—though not at the same clip. For its own fundamentals, wheat was supported by some fears of disease and quality issues in the U.S. because of the extreme moisture. The U.S. Department of Agriculture showed the winter wheat crop ratings decline to 61 percent good/excellent from 66 percent a week ago. Spring wheat planting has not been slowed, as much of the wet weather has not hit key spring wheat areas. The USDA showed 84 percent of the crop planted compared to 91 percent for the five-year average pace. Large global supply outlook is keeping a lid on the market, with increasing production estimates this week from Ukraine and the European Union.
The durum market continues to be quiet. Minneapolis prices have held steady for several weeks, and have not been able to mount any sort of rally (even with some support for wheat).
The canola market has seen some support spill over from the soybean complex. There have been extreme delays for the soybean crop in the U.S., but the expectation is still for soybeans to get planted (a combination of intended area, switching from corn, and the U.S. government aid program for 2019 requiring planting of something). Additionally, estimates for lower rapeseed output in Europe have been supportive.
The U.S. barley crop is nearly planted, with 87 percent completed. Just 54 percent of the crop has emerged compared to 74 percent for the five-year average pace.
Peas and lentils
Planting of pulses in Saskatchewan has been slow to start the spring. Planting is roughly 92 percent complete for all crops, which is actually ahead of the five-year average pace (83 percent). However, development of the crop is lagging, with roughly 38 percent of the planted pulse crops behind normal development, according to the provincial agriculture department.