'Interesting Times Ahead' As Trade's Focus Shifts to Crop Progress
Spring is finally here, and we got our first update of USDA crop progress yesterday, Monday, April 13 as well as the USDA April crop report Thursday, April 9. So far, both have received about equal billing, but soon crop progress and conditions of the growing crop in the U.S. will dominate price behavior over the summer.
On Thursday, April 9. USDA in their April S/D update raised corn stocks 50 mb to 1.827 bb, dropped soybeans 15 mb to 370 mb, and dropped wheat ending stocks 7 mb to 684. All these changes are minor and typical of the April report. Updates of world production included only a 0.5 mmt increase in Argentine corn production (to 24 mmt), and a 1 mmt rise in Argentine soybean production (to 57 mmt). Brazil production numbers were left unchanged from March. The market gave some attention to these numbers late last week, but then quickly returned to trading the weather and spring planting progress numbers.
Weather has been spotty, with weather too wet in much of the central and eastern Corn Belt as well as the southeast U.S. But in the northwest Corn Belt and northern Plains, a dry period is continuing from this winter, with temps a bit above normal, which are leaving soil moisture somewhat lacking as we enter spring.
On Monday, April 13 we got the first corn planting progress report for the season, and updates on other crops as well. Planting progress has fallen behind normal in corn at only 2% planted vs. 5% normally. Cotton is only 4% planted vs. 8% normally, and sorghum only 16% planted vs. 20% normally. Rice is only 26% planted vs. 30% normally, with oats only 28% planted vs. 33% normally, so you can see the pattern that we are falling behind normal planting progress in most of the Corn Belt and southern U.S.
However, the northern and western Corn Belt is dry and is seeing more rapid planting progress, with sugar beets at 15% planted vs. 14% normally, HRS wheat at 17% planted vs. 11% normally, and barley 27% planted vs. 15% normally. The western Corn Belt and northern Plains are seeing earlier-than-normal planting due to the beginning drought pattern that has plagued them since earlier this year.
Winter wheat conditions declined 2% last week to 42% rated G/E, with the Pro Ag yield model dropping 0.22 bu/acre to 47.56 bu/acre, down from last week. The rain Sunday and Monday this week arrived too late last week to improve conditions, but should show up in next week's crop rating (especially if more rain falls in the next week). It will be interesting to see if the rain can reverse the lower crop ratings. With good coverage Sunday and Monday this week in all but northwest KS, it's likely that we will see at least some improvement in the HRW wheat crop ratings.
As we move forward in this 2015 crop year, more and more attention will be paid to the crop conditions and planting progress as the 2015 season will start to take shape in the next few weeks. So far, it has been a rather dry start to the northwest Corn Belt and northern Plains, and a wet start to the eastern Corn Belt and southeast U.S. Interestingly, planting progress outside the northern Plains has fallen behind normal in spite of relatively warm conditions so far in early April. Perhaps this season is doomed to have difficulties going forward, with the conditions at an extreme at each end of the U.S. If this pattern continues through the crop year, we could indeed have some interesting times ahead of us.
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