Planting weather eyed
The USDA report was bullish, with the stocks numbers smaller than expected and total acreage smaller than expected (although corn was large). Interestingly, only two million more acres are planted in the Dakota's and Montana in 2012 than 2011, even though there was over 10 million acres of Prevent Plant in 2011. Apparently, in early March, farmers were still planning on eight million not getting planted? So, while those eight million acres 'float' around until June, we'll just have to trade the smaller acreage numbers for now.
The spring has been perfect, so far. So, those eight million other acres might still reappear yet in the coming few months. So far, planting progress is ahead of average, but it's still very early. It's expected that the planting pace this week will be rapid, but the only question is how many people are willing to plant this early? Conditions are ideal for planting, though, with soil temps warmer than normal and soil tilth and moisture levels perfect in many areas. For people who plant based on conditions, they have been going awhile. But, for those who like to plant by the calendar, it's still early.
Weekly exports continue to be slow for wheat and corn, but soybeans continue to be on the hot pace. With too little intended soybean acreage and smaller SAM crop estimates, soybeans have the most bullish situation right now. Old crop corn also has concerns, but there might be a slowdown in ethanol use of corn in the third and fourth quarters this year. That could be the linchpin that prevents corn from pushing through winter highs. Soybeans, however, could continue to push higher to try to attract acreage away from corn.
We'll need to watch the planting progress numbers the coming weeks, as early planting of corn could lead to larger production estimates by USDA.
Recall in 2010 that we had early planting, and USDA hiked the yield projection as early as May by two bu/acre, as the majority of corn was planted in April. Generally, early planing means higher yield potential. So, it wouldn't be unusual for USDA to do the same this year, if the majority of corn is planted in April. So far, that looks likely based on the early going.
Winter wheat conditions are much improved from last year, as well, given frequent rains in the HRW wheat belt. More rains this week will ensure that conditions will remain high - and yield potential as well will remain high. However, the crop is well advanced versus normal due to the warm spring to date. April is a time when the winter wheat can be susceptible to freeze damage - and that risk is heightened when the crop is ahead of normal pace. But, if we can get through the month of April with no cold snaps, then we could be home free as far as the HRW wheat crop. The next two weeks of weather continue to forecast mostly normal temps - but that is cooler than the recent few months.