Today is the USDA report, long awaited as it contains the projected planted acreage for corn, soybeans, and wheat.
These were much anticipated numbers, with all eyes focused on corn acreage and what happened to it in 2011 with late planting and wet conditions. How did farmers respond to the incentive to plant corn over virtually any other crop?
It's been a long bull market for grains, with prices rising for almost one year straight, on the production problems around the world, and demand.
The high use of grains from the U.S. resulted from the lack of availability of grains from the rest of the world. With high prices this spring (corn running to new all time, all world highs two weeks ago), we also are starting to limit the demand for grains - the job the market must do on a short crop year.
This week's rain events, across the northern Plains and North Dakota, likely ended the planting season for the state, leaving a tremendous amount of unplanted HRS wheat, barley, and durum acreage unseeded for the year.
While much was made during the season about the plight of corn acreage (and USDA cut corn planted acreage 1.5 million acres), in the final analysis Pro Ag figures it was the small grains that took the brunt of the loss in planted acreage from intentions.
The past 10 days have been a huge turnaround for the eastern Corn Belt in planting conditions. They went from virtually nothing planted in OH (only 19% of the corn to May 30) to a much improved outlook for production in the region.
It's been a long spring for producers in the HRS wheat belt and the eastern Corn Belt to this date, with planting progress lagging terribly vs. normal at this late time of year. It is becoming absolutely critical for planters to get things done in the next two weeks, as the opportunity to grow a crop this year is quickly closing its window in early June.
Corn prices are within striking distance of their new-crop December highs, as we move into the final stages of what has been a late planted crop for 2011.
The eastern Corn Belt states of OH and PA are struggling mightily with their planting season, barely getting started to date in the progress which is starting to get the trade worried with another wet five-day forecast.
We talked last week about how the market was focused on only the bearish side of the market.
That reasoning was supported by the expectation that prices had already allocated out the short crop from 2010 by cutting demand due to the high prices offered at the time, with $8 corn effectively limiting the market demand for ethanol, exports, and potentially even feed use. The market was intent upon focusing on the negative news items, and ignored the bullish aspects of the late planting to date in the US.
Today's USDA report was filled with information for both the bulls and the bears, but it was the bearish items that got noted in trade, with price plummeting limit down in corn, sharply lower in wheat, and moderately lower in soybeans.
While farmers are struggling to get the crop planted in what is turning out to be one of the latest springs on record, the markets are also struggling to maintain their current high prices. This is a quandary that one cannot help but notice this spring.
Weather continues to be the story in the US, as winter wheat is failing in TX, and just-in-time rains prevent a complete disaster in OK and KS this week.