Here’s a portrait you probably won’t want to hang in your living room:
This weed was happily soaking up the sunshine on one of the many, many unseeded fields I came across yesterday as I drove across a wide swath of central and Interlake Manitoba. I saw lots of alarming and ugly things, and tonnes of sights to underline one of the main factors that’s bothering the ag markets right now: what exactly got seeded this spring?
Across the prairies, Great Plains of the U.S. and the U.S. corn belts, analysts, traders, farmers are trying to get a sense of how much got in, how much didn’t, how much got switched for another crop, etc. It’s a big bunch of wild cards that could knock prices around a bit depending on how they get played.
Almost every day sees a shift of value between corn and soybeans, with wet weather in the Midwest making corn prices rise and soybeans fall, as traders assume farmers will switch out of corn and into beans, and every day of good Midwest seeding weather causes a drop in corn prices and a rise in soybeans. Wheat lives in a bit of its own world, especially hard red spring wheat, but weather across the HRSW zone has moved that market around a lot.
Those are giant crops, with many eyes watching. What’s the state of our knowledge about how much of the smaller crops got sown and when? Probably a lot less. That, and the strength of corn prices, is probably why oats futures in Chicago have seen such a steady rise recently.
The area I was driving around usually has hundreds of thousands of oats acres. This year, well . . .
So it makes sense the market is spooked about supply. On the other hand, lots got seeded well in the Yorkton oats heartland and east of the Saskatchewan border. So the situation might be OK.
As I wrote up a crop report today, I noticed that conditions, progress and situations vary wildly in every region, and that’s making it tough for crop forecasters to forecast. In some areas farmers are done seeding AND hardly done any seeding at all AND seeing nice emergence and development AND discovering seed rot and weak crops. So it’s a real mixed bag out there.
One thing’s for sure: no one really knows what’s out there right now, and when those answers become clear, markets will move. But which way . . .