The Market's Laser Focus
Corn planting season has started, although the pace is a little slow. Re-phrasing, the pace is a little slow compared to a 5 year average, but is ahead of last year. The market’s obsession with planting progress is heightened this year due to the incredibly slow and difficult situation faced by farmers in 2013.
Monday’s progress number of 6 percent was slower than many guessed, but perhaps the number was a little inaccurate due to the three day weekend/Easter holiday. Monday’s number will likely be slow. Still, it is the weather and progress in the middle of May that will be the most crucial.
This is the same time the market will be dealing with the May 9th USDA supply/demand report. The Outlook Board will present their first tables for the 2014-15 crop year. It will be a starting place for discussion, using the acres from the Prospective Plantings report and some sort of trend yield.
The old crop situation continues with the same themes—strong corn exports and a very tight soybean situation due to both exports and crush. While the Chinese continue to cancel South American cargoes, so much of their US purchases have already been shipped. This situation does help out by bringing in (yes, importing to the US) beans and meal originally destined for China. Because of the tightness, the US has a real use for unwanted Chinese beans.
If the Chinese issues cast a bearish attitude over the ag markets, the generally dry forecasts for the hard red winter wheat belt spark bullish waves of buying on a regular basis. While corn prices are influenced by the moves in wheat, basically it is still planting that reigns supreme.
For the second week in a row, it’s planting, planting, planting.
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