Wheat hovers near 2-1/2-week low on ample global supply

Alvin Kelly
April 20, 2017

Since the release of the March 31 Prospective Plantings Report and the April WASDE Report, the corn and soybean markets turn their focus to spring planting.

As a result of this week's rainfall, the ground is reportedly pretty wet in the U.S. Corn belt. The six million acre increase in soybean acres over 2016 came at the expense, in many states, of feed grains.

Suderman believes the USDA is "still about 100 million bushels too high" on corn feed usage.

History shows that these scenarios do actually occur, but the extent to which fast corn planting hurts soybean acres is actually greater than the extent to which fast corn planting helps corn acres.

The complete weekly crop and weather report is at the Iowa Department of Agriculture and Land Stewardship and USDA NASS. That was the highest close for a front-month contract since April 18 previous year. This timeframe for considering late planting draws support from planting date studies conducted in IL over a decade (here).

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Summary of crop reportRain continued to be an issue for Iowa farmers with just three days suitable for fieldwork statewide for the week ending April 16, according to NASS. This total is up three percent from last week, but was on the lower bound of pre-report estimates of 6 to 11 percent planted.

Spring wheat planting is 13% done nationwide, compared with 25% a year ago and the 21% average. Key states of note include IL (6% versus 13% 5-year average), IN (4% vs. 6%), Iowa (2% vs. 4%), Kansas (9% vs. 18%) and Missouri (17% vs. 25%). On the other hand, "knee high by the fourth of July" could lead to another bumper crop and further test the price lows growers have experienced in recent years. Deviations from planting intentions ranged from -1.9 million to 1.4 million acres and averaged -224,000 acres. Northwest, west central, and central Iowa farmers have planted over half their expected oat acreage.

Producers possess the ability to plant very quickly and still have more than a month to plant corn and six weeks to plant soybeans before planting is considered late by our definition.

Any delays in corn planting always gets analysts immediately thinking of the upside potential for soybean acres, especially this year given the acreage tug-of-war ensuing between the United States' two key crops. The large variation in the direction and magnitude of acreage deviations from intentions makes it hard to form expectations on corn acreage for 2017.

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