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Plans kicking up for spring planting

CRESTWOOD, Ky. -- With major reports on production in 2016 in the rearview mirror, farmers are looking at their planting decisions for 2017. Last year was a story of significant acreage added to "alternative" or non-commodity crops. Pulses boomed...

2221830+Wheat li jingwang istockphoto.jpg
li jingwang/iStockphoto

CRESTWOOD, Ky. - With major reports on production in 2016 in the rearview mirror, farmers are looking at their planting decisions for 2017. Last year was a story of significant acreage added to "alternative" or non-commodity crops. Pulses boomed, barley and mustard seed area expanded, while traditional commodity crops took up lower total area.

But the impact of this (on top of generally excellent growing weather in 2016) is large supplies of almost all groups.

Stocks of corn, wheat and soybeans are large, and unlike a year ago, supplies of peas, lentils, and mustard seed are comfortable, as well. This means price advantages are more difficult to find and capitalize on, so the planting season has more uncertainty.

Wheat

Wheat markets are off lows, but prices have not been rallying in a major way. Supplies are comfortable in the U.S. and Canada. On top of lower acreage in the U.S., conditions are being reported and they are not favorable.

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The market is aware that conditions reports during the winter do not have a direct impact on eventual yield or crop size. But, the longer the lack of rain in some areas and reports of winter damage in others continue, look for prices to stay near current levels, and perhaps push higher.

Globally, the markets in Russia and Europe are firm.

Durum

Durum markets have been quiet. Supplies are comfortable and prices have not changed in several weeks.

Informa has updated their U.S. planting estimates for 2017 and has pegged total area at 2.16 million acres from a December estimate of 1.88 million acres and 2.41 million acres planted in 2016.

Canola

Canola futures have continued to rally, pushing to new highs. Soybean and palm oil markets have been steady.

Chinese canola seed imports in the previous month dropped to 241,000 metric tons from 314,000 metric tons in December 2015. The switch came from a focus on importing products over processing the seed themselves.

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Concerns about South American production have been the key support for the canola market. Rain issues in Argentina and now in Brazil are impacting planting and harvest in those countries, respectively. A forecast for drier conditions should damper the rally, however.

Peas and lentils

India's rabi planting season for pulses is coming to a close. Farmers there are exceeding the "normal" pace by surpassing the average weekly progress of planting.

Total area planted to pulses is currently 15.77 million hectares. This is well above last year's 14.1 million hectares and the five-year average 14.62 million hectares. The record of 16.19 million hectares in 2013 to '14. However, the combined land for kharif and rabi planting seasons is already at a record 30 million hectares.

The U.S. has tendered for 2,000 metric tons of pulses for food aid. Purchases by U.S. Department of Agriculture's Commodity Credit Corporation office in Kansas City is seeking delivery from early March to mid April.

Mustard

Mustard export sales have been sluggish through the holidays and into the start of 2017. Production was good following a large increase in planted area, and so farmers are now looking at what to plant this year.

The early sentiment for the market is that mustard seed planted area will decline in 2017. Growers are dealing with the slow movement of mustard seed, and are expected to cut back during planting. The scale of the acreage reduction is the big question. The 2016 planted area was 525,000 acres, and estimates range from a 22 percent to a 33 percent reduction. This could take area down to as low as 410,000 acres.

Related Topics: MARKETSCROPS
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