Low Secondary Feedgrain Prices And Dryness Ups Corn, Beans And Cotton Area
Market Analysis
During the first half of June, the USDA surveys U.S. producers to see how their initial planting intentions have worked out this year. A wet early spring in the southern U.S. curtailed corn and rice seedings in the Delta, Missouri and into Texas and below normal April temperatures in the N. Plains kept spring wheat and small grains seeding sluggish in this primary growing area.
An opening after Mid-April prompted a surge in corn plantings in the ECB advancing seeding 10-15% ahead of the 5 year average pace in this region. However, heavy rains and cool temperatures stalled corn’s emergence, which eventually lead to a higher than normal replanting of fields in the ECB. Warmer conditions in the western Midwest prompted corn seedings to surge during this period and kept the US planting near its 5 year pace. A late month opening let corn seeding finish near normal, but bean plantings were behind going into June.
Overall, this year’s erratic U.S. weather (cold/dry conditions in the NC US swapped acres from spring wheat and wetness in Kansas switching sorghum to corn plantings) has us expecting 274,000 increase in corn acres from the March report. Flooding in the Delta this spring reduced rice acres and the N. Plains coolness slip oat and spring wheat has us projecting a 448,000 increase in bean acres on Friday’s report. Spring wheat seedings could also decline by 320,000 because of sluggish prices and cold weather while sorghum plantings decline by 307,000 acres. Overall, larger corn, soybean, cotton and durum plantings will increase the US major crops area by 440,000 acres to 251.84 million from March. Over the last 5 years, corn’s June acreage update has had relatively modest changes, but it has risen 3 out of last 5 years from March’s intentions. Soybeans June US area has increased for 8 straight years, but 2017’s rise may be modest because of March’s 6.05 million acre jump.
What’s Ahead
The USDA’s June 30 acreage report will update 2017’s producer plantings. This year’s dramatic difference between the E. Midwest and the N. Plains growing conditions are likely to up present planting levels, which are updated by FSA from August to October each year. This year’s drawn out pollination and flowering weather will likely remain the major determiner of U.S. output so anticipate more volatility ahead.
Disclaimer – The information contained in this report reflects the opinion of the author and should not be interpreted in any way to represent the thoughts of The PRICE Futures Group, any of ...
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