Grain futures will likely be stronger than oilseed futures for the next few weeks.
Cool weather, a slow melt and wet fields are delaying seeding from Canada to the U.S. Midwest.
There are implications for how much canola is seeded, but futures traders are mostly fixated on the big U.S. corn and soybean crops.
Corn normally is seeded before soybeans in the Midwest, but corn is delayed.
Only nine percent was in the ground by April 24, compared to 46 percent last year and the five-year average of 23 percent.
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Analysts had expected 13 percent of corn would be seeded by April 24.
Forecasts indicate the Midwest could see regular showers through the first two weeks of May, meaning further delays.
With yield potential declining daily, that could cause Midwest producers to start to shift corn acres into soybeans.
If production is hurt by yield drag because of late seeding and acreage shifts to soybeans, it will mean the corn stocks situation could become even more dire than the already worrisome forecast.
That is supporting corn and weakening oilseeds. Oilseeds are also pressured down by the big South American soybean harvest now nearing completion.
Corn is further supported by rising wheat prices, pressured up by the drought in the U.S. southern plains and delayed seeding of spring wheat in Canada and North Dakota.
However, farmers should also note that currency factors are also supporting crop futures.
The U.S. dollar is falling against most currencies because the Federal Reserve is keeping interest rates near zero to support the slowly recovering economy.
Other countries’ interest rates are higher.
Investors worried about the weak dollar are looking for alternative assets. Gold and silver are benefiting from this, as are crop futures.
But if the investor herd gets spooked for some reason, like it did after the earthquake and tsunami hit Japan, it will likely rush back to the U.S. dollar, which would have negative implications for crop futures.
