Ray Grabanski: Planting Delays?
We are soon entering the time when attention turns to planting conditions and crop conditions (winter wheat) across the country. Initially, soil moisture indications showed optimism for this year's crops, with mostly adequate to surplus soil moisture in many areas making the likelihood of a drought more remote in 2009. Usually, that means a disastrous crop will be avoided, and conditions can be optimal if the crop gets planted. The only problem that seems likely to hurt yields based on soil moisture would be delayed planting due to inclemently, wet weather.
Well, perhaps the worst case scenario is developing for spring planting conditions, as weather patterns have turned extremely wet. Its only March 26, but weather right now is sure indicating a late spring is likely for much of the US growing regions as wet weather has descended upon the corn belt, southern US, and northern plains. This is leading to severe flooding in some areas in the Dakota's and northern MN, and is soaking up soils in others where it appeared crops might get planted in a timely manner. Southeastern US growing regions got socked with some major precipitation this week (2-5"), with forecasts indicating more heavy rains are on the way for most of the central and southern US. While the moisture spread into KS and eastern winter wheat areas (which will help dry winter wheat areas), concerns about late planting of spring planted crops will start to surface if this weather pattern continues much longer. That is starting to turn what looked like a good to ideal spring planting situation into one that is looking more and more questionable. Bottom line: weather is turning more bullish for corn and perhaps more bearish for soybeans (late planting might mean even more acreage shifts to soybeans from corn). Already in the Northern Plains talk of prevented planting problems are developing due to saturated (and extreme flooding) problems.
There is more room for optimism. The US economy also is doing better, with stocks rallying back above the 7000 DOW area and indicating improvements are coming for the US economy in the coming months. Could it be that our recession is showing signs of ending? While the US recession has raged with almost non- stop negative news on the US economy since last spring, now we are actually hearing signs of optimism.
We had built into markets the sense that "the sky is falling" type mentality, but the next day comes and low and behold the sky is still there! Perhaps our negative attitudes are a little too negative? So if the US economy recovers and the world goes on with its business as usual, perhaps the sky isn't falling?
If the US economy starts to recover, perhaps the world economy will also recover and all our fears of foreboding collapse were just that, fear! "We have nothing to fear but fear itself" was a statement made in the depths of our last great depression. Does that statement also hold true today?