The U.S. has more old crop corn and soybeans around than expected, and that headline caused crop prices to plunge in recent days.
The market funk will likely linger until the lower prices spark large U.S. export sales.
As usual, some analysts question how the U.S. Department of Agriculture could find 10 million tonnes of corn more than what the trade expected.
They remember that in recent years the department has at times found a big pile of grain in one report, only to have it disappear in the next stocks report.
But for now, the report is what it is.
Weather issues were providing fuel to keep prices simmering before the March 28 reports sucked the oxygen from the market.
Freezing temperatures March 24-25 damaged jointing winter wheat in Texas, Oklahoma and southwestern Kansas.
It is hard to assess the damage yet. We’ll have to watch weekly USDA crop conditions reports. The winter wheat crop is already well behind last year’s condition because of drought, but it had been improving thanks to recent rain.
In oilseeds, cold, wet weather was hurting winter canola and other crops in Britain and northern France last week.
Britain has had a disastrous year for crop production because of excess moisture. As well, the past month was the coldest March in 50 years.
Britain is normally the No. 3 canola producer in Europe, following Germany, which leads, and No. 2 France. Germany’s canola crop is fine, and France’s canola is about two weeks behind normal. The planting season is delayed, which could also push back harvest.
A cold spring is also delaying fieldwork in Western Canada, potentially pushing back seeding and crop maturity. That could lead to canola flowering in the yield-sapping heat of July.
Canola also received modest support from the USDA seeding report, which puts U.S. canola intended area at 1.654 million acres, down six percent from last year. North Dakota’s intentions are down 16 percent at 1.23 million acres.
None of these factors are market movers now, but they are lines in the story that is the 2013 global crop, and we won’t know how it ends until fall.