Key report should sort out conflicting planting information
Corn acres will be down more than 10 million from March U.S. Department of Agriculture intentions data. More corn is going in the ground over the last couple of weeks.
Growers are dealing with two contradictory ways of looking at the situation: Prevented planting is the best option for most farmers instead of switching to soybeans; or payments from the government in a Market Facilitation Program will offset any production losses, so farmers should plant something.
It truly is impossible to get a macro view of what is going on. Farmers either have made their decisions for planting or will be doing so shortly. But conditions are very different in Ohio versus South Dakota and everywhere in between. That puts a lot of attention on Friday's U.S. Department of Agriculture report on planted area for major crops.
The expectation is for more reduction in corn area, but the amount is unknown. And will soybeans or spring wheat get an uptick due to switching? Or has it been too wet for those crops to get planted too? Plus, what will the impact be of payments for planting something in the aid package from the U.S. government?
Look for that report to give direction into the summer.
Wheat markets are off recent highs. Weather has improved in some areas, allowing for spring wheat futures to fall.
Conditions dropped from last week's rating of 81% good/excellent for the U.S. crop to rated 77% good/excellent. The winter wheat crop is still in good shape despite the wet conditions across the Plains with 64% of the crop rated good/excellent. Harvest is behind its normal pace with just 8% done compared to 20% for the five-year average pace. Saskatchewan is still too dry. Many are fearing some big crop problems if needed rains do not come soon.
The durum market was unchanged from a week ago. Pricing is not moving much, even with recent support in the wheat market.
The rally in the canola market during May and early June has cooled. Prices have been trading mostly sideways for the last couple of weeks. Traders just do not have enough new information to drive prices. Conditions are too dry, but demand remains non-existent from China. Until something changes, look for more sideways trade.
The U.S. barley crop is behind its normal development. Two% of the crop is headed compared to 12% for the five-year average. Crop conditions for the U.S. barley crop were lowered. The USDA took ratings to 76% good/excellent from 84% a week ago.
Mustard seed markets have been very quiet, with little trade activity of note. Dryness has been a big concern across Saskatchewan, and recent rains have been helpful but more would greatly benefit the mustard seed crop.
For pulses, growing conditions in Canada are a key concern. Dry weather has many fearing yield losses, though some relief has been helpful in areas. Another issue is the Indian government's move to boost import duties on U.S. products. Duties were increased from 35 to 50% for U.S. sourced lentils.