Crop getting planted or not?
The 2009 crop finally is getting closer to being planted, with 82% of the corn planted as of yesterday, still well behind 'normal' of 93% planted, and even behind last year's pathetically slow 86% complete (remember the reason corn ran to $8???). However, we still are not out of the woods with the 2009 crop, as the slow planting and cool weather to date has left the corn/soybean crop with a very slow start in 2009. It leaves it vulnerable to other weather problems this summer, and so far that has kept prices at near the year's highs.
Soybeans are 48% planted, with 23% done last week in the best week so far of 2009. Still, we're behind the 65% normally planted at this time, and that along with unusually strong Chinese buying/US exports is keeping soybean prices at yearly highs. US spring wheat prices also have soared, with prices topping $7.50 this week as people wonder about the ability of HRS wheat producers to get the acreage planted. We've only planted 79% of HRS US acreage, well behind normal of 95% planted and with much of ND getting rain this week, we may have ended any hope of planting in some areas (like NE ND, where heavier rains fell over the weekend). The slow planting issues are finally getting the full attention of the market, and have forced some premium into prices due to the planting problems. Its likely that some of the intended HRS wheat acreage will be planted to other crops, or simply prevent planted (nothing planted on wet acres, and collecting 60% of insurance coverage).
Although we've got all these problems showing up statistically now, we are also coming off our best week this year of planting progress, with 29% of HRS wheat planted last week, 20% of US corn, and 23% of US soybeans. This was by far the most planting done in any week this year, as many areas were able to plant crops. The good progress last week might actually be bearish, yet the market is continuing to rally this week on the still slow planting prospects.
But at what point is slow planting progress built into the market? Already, we have prices at levels much higher than we started this spring. Certainly the underlying inflationary environment is having some impact on ag commodity prices, dragging them higher. The planting progress being slow helps that process, but at some point we will hit levels that we will need to sell. Have we hit those levels yet?
Pro Ag has started selling grains for 2009 again, making sales of wheat, corn, and soybeans recently as prices keep improving. When to price everything will be the one minute in history when markets top. Is that today, tomorrow, new week, or next month? We're getting close, but as of today are still pushing into new high territory.
What comes next is anybodies guess, but we are beginning pricing into this rally from here as we are now hitting targets we set last winter for 2009 pricing (some of which were openly questioned as to whether they would ever get hit). Here we are at $4.50+ Dec corn, $10.50+ Nov. soybeans, and $7.50 Sept. Mnpls HRS wheat futures - all acceptable prices for 2009 crop sales. Have you sold something, or are you waiting for even higher prices???