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Are spring planting weather delays ahead?
Weather in the US is starting to become more important, as rather than only looking at SAM weather one now needs to focus on US weather for clues as to the direction of futures prices. SAM weather is ceasing to be very important (other than for harvesting soybeans) as we are near the mid-September US equivalent time in SAM in March. That means that precip will become less important in SAM weather forecasts, and dry weather will actually become favorable weather during harvest.
As Argentina begins harvest and expands southward, there will become 2 countries other than the US that can ship soybean product to the rest of the world, so the US will likely see a tail off of shipments from their ports to places like China. Soon, SAM soybeans will become cheaper to import, and bottlenecks at Brazilian ports will become less important. That could pressure old crop soybeans, especially the months that have been supported by the Brazilian shipping delays.
Soon the focus of the market will shift from SAM production prospects to US prospects, and so far weather in the US is not very cooperative for ideal spring planting conditions. The 14 day forecast (which takes us to the end of March) is now forecasting cool and wet conditions across the country, with the wet conditions favoring the eastern corn belt (which really doesn't need the moisture). However, the western corn belt does need the moisture, but they are not forecast to get as much rain as the eastern corn belt. That is unfortunate, as it will lead to potential planting delays in the eastern corn belt due to wetness. The western corn belt would be able to start planting as soon as temperatures warm, but so far those temps are not forecast to occur. Instead, cold weather will likely delay the snow melt, and keep this dry area (it has below normal soil moisture levels) from starting planting early as well.
Overall, this is not a good forecast to get started with spring planting early (as occurred last year), and will delay planting as we begin the planting season. Of course, there is still lots of time to turn around this situation, but for now the weather pattern is none that could lead to a late planting season in 2013 - one that could especially support corn prices (likely at the expense of soybeans). If planting is delayed this spring, it could lead to increased soybean acreage and less corn acreage. So the weather forecast now will support corn prices and pressure soybeans.
Much is yet to be determined with respect to US weather. Will the wet pattern in the western corn belt since Jan. 1 continue into spring? Will that further melt away the drought in the western US, much the way the drought in the central and eastern corn belt melted away since last fall? Will the wet weather pattern continue in the eastern corn belt, where rain actually will become bullish if it causes planting delays in the eastern corn belt? Will wet weather this spring continue in the HRW wheat belt, spreading into the dry western part of the HRW wheat belt, and further improve winter wheat crops? Or will the drier weather pattern in the western HRW wheat belt spread into the eastern HRW wheat belt, and thus decrease the yield potential of HRW wheat as we move toward harvest in June?
Many questions to be answered, which of course will then lead to even more questions!
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