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Improving Winter Wheat, Planting Progress
Yield prospects for winter wheat and spring-planted corn/soybeans should improve significantly this week, as warmer weather should help with germination of corn and soybeans, while wet weather across the HRW Wheat Belt should also improve crops there. Combined, these two forces should pressure prices of corn, soybeans, and wheat the coming week.
Weather forecasts remain warm and wet the coming two weeks, with the warmest weather in the northwest Corn Belt that will help planting activity in the Dakotas, Minnesota, Wisconsin, and Michigan. However, wet weather will also delay planting in North Dakota and northern Minnesota as this weekend another strong front will bring rain Friday and Saturday over this area. There has been an open window of planting activity in this region over the past four days as finally planters start up activity in North Dakota. A lot of progress has been made, but it is also a lot to ask of farmers to get their crops planted in just four to five days.
There will be prevent-planting corn in North Dakota as the final planting date for northern areas (and most of the state) came and went on May 25. However, the market is down sharply overnight on the excellent planting progress around the Corn Belt last week - with majority of corn now planted as well as soybeans in the Corn Belt. It's likely that planting progress moved ahead of normal again last week, as will be reported in this afternoon's progress report. So grains are going sharply lower on the warm/wet forecast now that most of the crop is in the ground. This is the perfect forecast to bring rapid germination and finish off the planting progress in most states (with the possible exception of North Dakota, where prevent planting will once again be a huge problem in 2014).
Corn and soybean planting should advance to near complete across the Corn Belt with the exception of the northern tier states of North Dakota, Minnesota, Wisconsin, and Michigan. However, even in these northern states the best progress of the year should occur over the weekend, with little to no rain in all these states forecast the next week with the exception of North Dakota (.5 to 1.5 inches, locally 2- to 3-inch rains forecast for Friday/Saturday). It will likely only be North Dakota with significant prevent-planting problems in 2014 corn, with soybean planting likely to advance nicely as well given the warm forecast the coming two weeks. It might be that most of the soybeans even in North Dakota will get planted given the warm forecast. Crops will be germinating quickly now that temps have warmed across the Corn Belt to above average.
HRW wheat areas received the best rainfall for the year over the weekend, with excellent coverage and rainfall amounts across even the far western dry areas (.5 to 1.5 inches, locally 2- to 4-inch rain amounts with 95% coverage). This will markedly improve winter wheat yield prospects in this afternoon's report: The only question is how much the yield model will rise due to the excellent rains over the past week.
Fundamentals have turned remarkably bearish as we move into the new crop 2014 year, with projected corn carryout at 1.7 billion and soybeans 330 mb with a trend yield. Given the excellent current weather forecast, we might have an above-average 'trend' yield coming in 2014 crops for corn, soybeans, but the heat early could hurt HRS wheat yield potential. Pro Ag projects corn to drop $1 or more, and soybeans to drop $2 or more by harvest. That's why we are 100% priced in 2014 and 2013 corn/soybeans. Target $6.95 July Chicago wheat to advance wheat sales.
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