Cereal grain prices fell after the U.S. Department of Agriculture’s seeding intentions survey.
As expected, U.S. farmers said they will plant a huge corn acreage and a large soybean acreage. If the weather is good, that could produce record crops.
This produced a litany of woe among farmer-focused analysts.
“As if increasing Canadian oat supplies were not bearish enough for oat prices, the USDA confirmed what was expected by most traders – higher U.S. plantings for corn, soybeans and (spring) wheat. All this is going to keep pressure on grain prices in general, including oats, for the foreseeable future,” said OatInsight analyst Randy Strychar in a commentary following the release of the report.
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Brian Henry of Archer Financial Services gave a similarly bleak outlook for wheat, regardless of the crop’s less-bearish planting intentions.
“It appears total wheat acres will be down about five to 5.5 million from last year,” said Henry in a commentary.
“I expect the corn and bean acres to increase on the next report. I do not believe that will be the case in spring planted wheat.”
USDA expects spring wheat acres to reach 13.9 million acres, which is 600,000 more than last year and above trade expectations of 13.5 million.
The U.S. Grains Council gave a positive spin to the bearish news.
“U.S. farmers step up to the plate every year,” said Tim Burrack, a council member and the Iowa Corn Promotion Board chair, in a news release.
“U.S. farmers use top of the line technology and modern farming techniques to ensure a high quality product. We meet the domestic needs of the livestock industry and the ethanol industry and are able to meet the needs of our trading partners and customers around the world.”
Heavy demand will be needed to lift sagging wheat and barley prices. Canadian Wheat Board Pool Return Outlooks are down and the cash barley market in Western Canada is weak in the face of mountains of U.S. corn.
“We just have scads of feedgrains in Western Canada,” said Doug Chambers.
Recently durum has flowed into the southern Alberta market because of dismal milling durum prices, putting more pressure on feedgrains.
Chambers said he thinks the prairie market may firm up in the next few weeks. Road bans will temporarily reduce deliveries.
“But the bigger thing looming on the horizon is the dryness.”
If the drought continues, farmers with livestock will be unwilling to sell their feedgrains, Chambers said.
