You are here

Trade Joins Weather as Major Spring Market Factor, Analyst Says

Northern states could lose corn yield potential.

Typically, in May, grain markets are all about three market factors.

The first is weather, the second is weather, and the third factor is weather.  

Today, we have to crowd in a fourth factor; trade negotiations. As of Monday, May 6, we woke to a sharply lower market, as Pres. Trump Sunday threatened to add $30 billion in tariffs to Chinese imports Friday, and another $81 billion in a few weeks. We have $32.5 billion in tariffs right now on Chinese imports, so it’s quite an escalation in U.S. import duties on Chinese product. But it did get the markets’ attention! While U.S. grain markets plummeted down 10¢ per bushel in the corn market and 20¢ per bushel in the soybean market, U.S. stock markets were down less than 1% while Chinese stocks were down 6% to 8%. The Chinese, at first, considered cancelling this week’s negotiations, but instead delayed them just one day.  

Weather forecasts have improved considerably in the eight- to 14-day forecast today, with less rain and warmer temps now forecast, which would provide a window of planting opportunity in the southeast Corn Belt (ILL, IND, OH, KY, TN). The first seven days forecast are still relatively wet and cool for most of the Corn Belt, with the wettest in the central Corn Belt. Yet, some dry areas do emerge, including most of ND, SD, and MT and parts of northern MN. It also is drier in the southeast Corn Belt including ILL, IND, OH, and KY in the next seven days.  

Temps are forecast below normal the next seven days, but then considerably warmer  into the eight- to 14-day forecast to near normal, and even above normal. The precip forecast is also drier in the eight- to 14-day for many states including MO, ILL, IND, OH, KY, TN, and AR. It’s likely they will have a planting window open up in mid-May that could allow them to complete planting by the end of May or early June. That would be quite an accomplishment considering where we are today, but many farmers could do it if a window of opportunity arose for seven to 10 days.    

Crop progress, out yesterday afternoon May 6, showed pathetic planting progress in the U.S. last week, with corn only 23% planted into the second week of May (-23% from normal), with only 6% emerged vs. 13% normally. 

Soybeans are 6% planted, 8% behind normal. 

Cotton is 18% planted (1% behind) while sorghum is 22% planted (7% behind), and rice 48% planted (21% behind). 

Sugar beets are 31% planted (36% behind), oats 50% planted (22% behind), HRS wheat 22% planted (27% behind), and barley 37% planted (19% behind).  

There are some real issues with projected planted acreage, as the ideal time to plant HRS wheat in MN and SD has passed already with only 7% planted in MN (44% behind normal) and 19% planted in SD (57% behind). 

It’s possible that up to a third of SD/MN HRS acreage could end up in another crop (corn or soybeans most likely) or prevent planted (pp) ultimately. 

North Dakota is also seriously behind normal planting (13% vs. 37% normally), and acreage in the east is likely to switch to corn, soybeans, or some other late-season crop. We wouldn’t be surprised to see a 20% cut or more in HRS wheat acreage in the U.S. in 2019!

For corn, there also is likely to be significant losses in acreage to other later season crops or just prevent plant.  States with the worst struggle are those most susceptible to yield loss from late planting, or acreage loss from not being able to plant at all in a timely manner. 

Northern states such as MN (only 6% planted vs. 42% normally), SD (zero planted vs. 29% normally), ND (3% planted vs. 23% normally), and WI (7% planted vs. 24% normally) are at risk of losing significant acreage from corn and into either soybeans or prevent planted. These northern states, even if they get it planted now, will lose yield potential due to late planting. So, these states are in serious jeopardy of losing corn acreage to either soybeans (or other crops) or pp.  

The states of IL (10% planted vs. 66% normally) and OH (2% planted vs. 27% normally) will likely not lose acreage to PP as it almost always gets planted, but they will likely lose some corn acreage to soybeans and yield potential due to late planting. The numbers given are bullish corn unless that window of planting opportunity hinted at in the eight- to 14-day forecast today opens up wide enough to drive a 64-row planter through (day after day)!

We note that soil moisture has not diminished, and instead it actually went up 1% to 93% adequate/surplus topsoil moisture nationally. Subsoil moisture was steady at 93% adequate/surplus (basically saturated) this week, and will not lead to quick drying and planting of crops once it dries out.  

The market is paying attention to the China trade issues, with Pres. Trump apparently tired of Chinese bickering about how to lift current tariffs. So, Sunday he threatened to raise Chinese tariffs another $30 billion Friday (they are $32.5 billion now) and another $81 billion in a few weeks. 

The message was meant to remind China that the U.S. was generous not to impose another $111 billion on the remaining Chinese product (even though China had already tariffed all of U.S. exports). Then let’s negotiate about lifting tariffs, and the U.S. will be more generous once our hand is fully played.  

The Chinese initially considered cancelling this week’s negotiations, but instead just delayed by a day Liu’s flight to meetings Thursday and Friday (instead of starting Wednesday) in Washington. 

Market reaction calmed. But U.S. markets were down less than 1% Monday, while Chinese equity markets were down 6% to 8%. 

The Chinese are much more vulnerable than the U.S. Hopefully, this jump starts trade talks, so the deal will get done quickly. God knows agriculture needs it badly!  We can’t afford a long, drawn-out affair to get the deal done.  


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

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.


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.

Read more about

Tip of the Day

Throw Out No Silicone Before Its Time

How to preserve caulk tube The tip of a tube of silicone will often dry out in between uses. To create a complete seal for an open tube, I insert the tip into a... read more

Talk in Marketing