You are here
Attention turns to growing season
U.S. planting continues to drag on, with the only corn being planted now to be used for silage. Meanwhile, soybean planting continues.
This was a fairly good week for soybean planting, with about half of remaining soybeans put into the ground. The USDA indicates that this week's soybean planting advanced to 85% complete from 71% last week. We now only lag the normal pace by 6% points (91% normally planted). So, we continue to 'catch up' to the normal pace. That 6% we are behind the normal pace amounts to about 4.6 million acres of soybeans we are behind the average pace of planting on June 16. So, it's likely we will lose some yield potential on these acres.
However, it also means we are now turning our focus towards crop conditions, not planting progress, as we move into the growing season for the grains.
Corn crop conditions improved 1% this week to 64% G/E, up from 63% last week and above last year's 63% rating. The Pro Ag yield model for corn jumped this week 0.5 bu/acre to 153.5 bu/acre, reversing the declines and giving hope that this year will indeed be different than last year's devastatingly small crop. While below 'trend' of 158 (Pro Ag trend yield) and USDA's 156.5 bu/acre projection, the direction of improving is important as we now have good moisture conditions across the US. Its likely that with warming temps conditions will continue to improve.
Soybean conditions also were strong at 64% G/E in the first week of ratings, well above last year's 56% rating. The Pro Ag yield model for 43.2 bu/acre, still above USDA's projected 44.5 bu/acre but respectable for the first rating of the year. What really matters now is the direction of that yield model. Recall, last year, we had sharply declining conditions from here on out to finish with a devastatingly poor crop of only 39.6 bu/acre. But, with moisture everywhere, that is unlikely to continue with below average crops. Instead, Pro Ag anticipates conditions of crops to improve with warming conditions, and that will spell a whole lot different price outlook than 1 year ago.
Other crop conditions are showing improvements, with cotton at 42% G/E, the same as last week but down from 53% G/E last year. Sorghum conditions are better than last year at 53% G/E vs. only 47% last year.
Sorghum is 84% planted, ahead of normal pace of 82% planted at this time.
Sunflowers are only 55% planted,, well behind normal pace of 77% due to lateness in ND. Rice crop conditions are 68% G/E, up from 62% last week.
Winter wheat conditions were steady at 31% rated G/E, well below last year's 54%. That puts the Pro Ag yield model for winter wheat at 44.38 bu/acre, well below USDA's projected 46.1 bu/acre and down .33 bu/acre from last week, another sharp decline. However, the rains this week in OK, TX, and KS (75% coverage of .5-1.5", locally 2-3") should improve that next week.
HRS wheat planting is now 92% complete, up 5% from last week with ND advancing to 86% complete, up from 77% last week. We are slowly getting the crop planted, but there is likely to be .5-1 million acres of PP in this crop as well. HRS wheat conditions improved sharply (6%) to 68% G/E, now behind last year's 76% but the direction of crop improvements is important to recognize.
Essentially, we have a late planted crop that is quickly improving across the US. So, despite the late planting progress, Pro Ag remains bearish, as supplies in 2013 will much exceed supply even with planting problems.
Specs and hedgers can now sell corn, soybeans, and CBOT wheat again, putting on hedges for 2013, 2014, 2015, or 2016 crops. Downside price targets are $4.50 Dec corn, $9-$9.50 November soybeans (down from $10, due to improving planting conditions and acreage shifts from corn), and $6 Chicago July wheat.
This material has been prepared by a sales or trading employee or agent of Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Progressive Ag Marketing's Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.
DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS
COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Progressive Ag Marketing believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that advice we give will result in profitable trades.