With some surprises likely (market anticipating 2+ million extra corn acres and less soybeans, more durum and HRS wheat), the USDA planted acreage report and quarterly stocks numbers could have a market impact on Friday.
But, weather will remain dominant though, as the report numbers may only get a one-time trade blitz for 10 minutes. The debate over how much was planted is gone, once this acreage report is released, while the weather will continue to trigger debate long after this report.
We anticipate the market has already correctly guessed the major impact of Friday's report (1.8 million more corn and less soybean acres). So, the only reaction might be a half million 'miss' on acreage one way or another (which amount to 75 million bushel (mb) difference for corn and 20 mb for soybeans).
Weather, on the other hand, over the next 2 months could change corn yields as much as +/-15 bu/acre (1 billion bu corn) or 2 bu/acre soybeans (150 mb). With the yearly national average farmer price shifting about 4c/bu for corn and 30-60c/bu beans, major price impacts will be made by the weather rather than Friday's report.
One thing about 'trader's expectations' that caught our eye was an anticipated hike in durum acreage (as well as HRS wheat acreage). Pro Ag vehemently disagrees, as if anything the soaring HRS wheat prices (and lethargic durum prices) this spring may have encourage even more shifting to HRS wheat over durum. Net, this could mean an even larger hike in HRS wheat acreage than anticipated since the durum number is ill-conceived.
Producers had plenty of financial incentives to plant even less durum (with durum prices at a huge discount to HRS). This could support durum long-term following the report, and pressure HRS wheat prices. There may have been some shift in southeastern ND away from corn and towards soybeans as planting was very late in this region (the opposite direction of trade anticipation). This could also be the case in Indiana, where planting was very slow as well. If Pro Ag had to guess, we'd expect that private guesses of a 2.3 mln acre shift from soybeans to corn is high.
After the report, weather will dominate trade within 15 minutes of Friday's open, if there are no major report surprises. No one is ever certain what the weather will do, and no forecaster is accurate more than 10-14 days out, so there always is uncertainty (and therefore debate) on what the weather will do.
Weather forecasters continue to call for mostly warmer and drier weather in the western Corn Belt, where soil moisture levels are most lacking. There is a chance of rain coming into the far eastern HRS wheat belt this weekend. Iowa and points east also have a chance of some rain through the weekend that could have some influence on grains. But, the next few days will also bring mostly 90-100 degree temps in the HRW wheat areas, and will stress sorghum, wheat, and corn/soybeans in that area. Corn pollinating in the OK/TX/KS and Delta region will be hurt by the heat as well.