You are here
Corn Planting Has Caught Up, Now It Faces More Delays
The past week has been dominated by relatively good weather for planting in the Corn Belt and HRS wheat belt.
Also, there has been relatively good weather for growing winter wheat crops. That has meant farmers have an opportunity to go out and plant crops, and farmers are not the type to miss out on any opportunity.
So, planting has virtually caught up to normal, as evidenced by the weekly crop progress report out Monday, May 14. Weather forecasts are still relatively favorable for spring, with most warm and wet forecasts continuing into the end
of the month – also relatively favorable. But increasing attention by President Trump on negotiating a successful trade deal with China is supporting the market in spite of the improving weather.
Weather forecasts remain mostly warm and wet for the next 14 days, which is a good forecast for spring to get the crop germinated and growing. The excellent planting season weather recently has allowed the planting progress to basically
catch up to near normal for nearly all crops. That is an amazing development for mid-May considering the horrible start we had with the cold and wet weather in March and April (mostly snow in the Corn Belt). But catch up we have as corn is 62% planted (only 1% behind normal) and 28% emerged (1% ahead of normal).
Soybeans are 35% planted, 9% AHEAD of normal and 10% emerged, 4% ahead of normal. These are great numbers considering the late start. HRS wheat is 58% planted (28% done last week), now only 9% behind normal with 14% emerged (22% behind normal). Barley is 62% planted, only 8% behind normal after planting 20% last week nationally. So, things have moved along nicely in the past two weeks, with essentially everything that is planted done since April 27 or so.
Cotton is 36% planted, 5% ahead of normal. Sorghum is 32% planted, 1% behind normal while sugar beets are 84% planted, now 6% ahead of normal.
Winter wheat is 45% headed, 8% behind normal, but conditions improved 2% to 36% G/E despite limited rainfall again last week.
The Pro Ag winter wheat yield model rose again this week, this time by a large 0.48 bushel per acre to 47.6 bushels, just slightly below trend of 48.9 bushels per acre. It is going up, not down, and that means more bushels of wheat to contend with after a relatively bad start to the crop. It’s especially surprising that conditions improved 2% when there was limited rainfall and above-normal temps in HRW country. But perhaps the wheat outside of Kansas, Oklahoma, and Texas improved enough with rain and warmer temps in much of the rest of the country.
Much has been made of China and the U.S. trade negotiations this week, as a Chinese negotiating team has come to the U.S. to talk trade.
Sunday morning at 8 a.m., Trump tweeted: “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!” This was his announcement to reverse an earlier administration decision, and allowing them to buy parts in the U.S.
Sunday at noon,Trump tweeted: “China and the United States are working well together on trade, but past negotiations have been so one sided in favor of China, for so many years, that it is hard for them to make a deal that benefits both countries. But be cool, it will all work out!”
Translation: It may take some time, but I’m going to work out something with China that is mutually beneficial.
Yesterday evening, Trump tweeted again: “ZTE, the large Chinese phone company, buys a big percentage of individual parts from U.S. companies. This is also reflective of the larger trade deal we are negotiating with China and my personal relationship with President Xi.” The point being is that while most Americans were enjoying the weekend, Trump spent it thinking about the trade deal with China, which is indeed a very big deal for the entire U.S., and in agriculture, to soybean growers.
Market support in soybeans Monday reflects the thought (and focus) that Trump wants something done in trade with China, and has certainly taken actions to support the idea of how much he wants it done, too. That’s good news and already, the market recognizes it by regaining 15$ yesterday. (We lost about 40¢ to 50¢ on the initial news of tariff threats.)
Oddly, the market was up again overnight in spite of negative news from crop progress at 3 p.m. yesterday, showing planting progress has essentially caught up to normal, and winter wheat crops continue to improve . . . with favorable weather to boot.
So the market thinks the Trump attention to China trade deals is more important than the planting progress/crop improvement? Interesting!
Typically, nothing, and I mean, nothing, matters more than the growing season weather in the U.S., with grain prices pretty much putting about 80% to 90% of their price movement on the weather from about April 20 to September 20.
So, it is surprising for the grain markets to pay attention to almost anything else during this important growing season. Acres planted and yield are important determinants of supply, and supply is half the price discovery equation (supply-demand). While the start of this year was horrible, making it look like supply would be in jeopardy, now as we are midway through planting it appears that rather than a below-average crop, we might have trend yields in our sights for spring-planted crops. That’s a huge improvement in just a few weeks, and it has set the market back some on that news.
Demand is also important and half the equation in the supply-demand scenario, but typically isn’t focused on until later in the season (or from September 20 to April 20). Yet, it still is important, so any China deal would certainly have an impact. But when will it actually get done?
Ray Grabanski can be reached at firstname.lastname@example.org.
Ray Grabanski is President of Progressive Ag Marketing, Inc., the top Ranked marketing firm in the country the past 8 years.
This material has been prepared by a sales or trading employee or agent of Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Progressive Ag Marketing's Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.
DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Progressive Ag Marketing believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that advice we give will result in profitable trades.