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Grain Market Lulled to Sleep by Potential Fast Planting, Analyst Says

Delayed planting pace isn’t catching a break.

Crop progress was out yesterday, with planting falling further behind in nearly all crops, as the cold/wet spring still has not warmed or dried soils enough to allow planting in most areas. 

Corn planting progress is only 3% (up 1% last week) vs. 5% average so we’ve now fallen further behind normal.  

Cotton is 7% planted (up 1% last week) and equal to average. 

Sorghum is 16% planted (2% planted last week) vs. 19% normally so now 3% behind normal. 

Rice is 26% planted (+7% last week) and now 9% behind normal.  

Sugar beets are 8% planted (up 5% last week) vs. 16% normal so 8% behind normal pace. 

Oats are 30% planted (+3% last week) vs. 40% normally so we are 10% behind normal. 

Most all spring planted crops are falling further behind normal, and next week’s weather forecast isn’t much better. 

It’s likely that by the end of April, the U.S. planting pace will be one of the slowest ever and with soils still saturated from a wet fall and winter and cool spring, it could be awhile before much gets done. Last year’s memory of a slow start and rapid planting in May seems to be lulling the market into complacency – perhaps not a good idea?

Winter wheat is 6% headed, 3% behind the normal pace while winter wheat conditions remain high at 60% G/E, equal to last week but well above last year’s 31% rating. HRS wheat is only 2% planted (+1% last week) vs. 13% normal so we are 11% behind normal. Barley is 8% planted, 11% behind normal; most progress is being made in the Northwest, with almost no progress made in the northern Plains region where most of the barley is typically planted.  

The year is clearly very late, and frankly it’s going to take some time to thaw out and dry out soils, which are very wet this spring. Soil moisture ratings are still extremely high, with topsoil rated 94% adequate/surplus (+1% last week) vs. only 77% last year at this time. Subsoil moisture is 93% rated adequate/surplus (+1% last week) and well above last year’s more ideal rating of 73%. So the U.S. as a whole is very wet, and it is going to be a late planting
year not just because of the slow spring thaw, but also the saturated condition of soils here in mid-April yet.

Weather forecasts are calling for mostly normal precip now across most of the U.S. the next 14 days, and perhaps a little above normal in the Southeast. Temps will average above normal for most of the U.S. growing region except the Southeast, which will see below-normal temps for the next 14 days. That is a bit wetter in the western Corn Belt than yesterday, and will likely mean slow planting progress in most of the U.S. through April.  There is just scattered rain today in the U.S., mostly in the northern third, but another storm will move through the Corn Belt by the weekend.  

Treas. Sec. Mnuchin updated many reporters, early this week, on the China trade talks. He mentioned that progress is being made to the point that he suggested we are in the final stages of negotiations. 

Once the China deal is done, then the U.S. can put its full attention on the EU and Canada, who are both sharpening their sabres to prepare for negotiations. The problem both have, though, is that the U.S. buys much more from them than they buy from the U.S. 

USDA gave us its monthly S/D report on April 10, with most of the U.S. numbers correctly anticipated by the market as most came from the stocks numbers released on March 29. Corn stocks, of course, were up to 2.035 billion bushels, about 22 mb larger than expected and up from 1.835 in March. Soybean stocks were 895 mb, about 18 mb smaller than expected and down 5 mb from March.  Wheat stocks were 1.087 billion bushels, about 11 mb larger than expected and up from 1.055 in March. Overall, it was slightly negative corn, negative wheat, and friendly soybeans. 

Like most April reports, it didn’t amount to anything the market really wanted to trade, as the new crop 2019 year is upon us, and weather forecasts are more important than old news like U.S. stocks numbers.  

In numbers that were updated based on recent weather, Argentine corn was up 1.0 mmt to 47 mmt, Brazil corn up 1.5 mmt to 96 mmt, and Brazil soybeans up 0.5 mmt to 117 mmt. 

Overall, the drought ended in Brazil by early March, and so small increases came due to improving late-season crops. These numbers were perhaps the most bearish as South America’s production update is actually new information rather than a rehash of U.S. numbers.    

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Ray can be reached at raygrabanski@progressiveag.com.  
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Ray is President of Progressive Ag Marketing, Inc., a top Ranked marketing firm in the country. 

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