The U.S. Department of Agriculture reports on seeding intentions and March 1 stocks were negative for corn prices and a little supportive of soybeans.
However, after the initial reaction it appears that traders don’t want to drive corn down too far as long as there are spring weather risks.
The seeding intentions report did surprise the market, showing a smaller than expected shift from corn to soybeans.
However, the surprise was not large enough to make a fundamental change in the market psychology, which is focused on the record large South American crops, large year end stocks and generally good early prospects for the Northern Hemisphere’s 2015 crops.
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Let’s look at the USDA numbers.
Analysts had expected that corn, with its high seeding cost, would be a big loser in the planting intentions survey. However, the decline was less than what the trade expected.
The survey showed farmers intend to seed 89.2 million acres to corn, up from the average of trader forecasts of 88.73 million acres. Last year they seeded 90.6 million acres.
Soybean acreage came in at 84.635 million, shy of expectations for 85.919 million. Last year farmers seeded 83.701 million acres.
Also, the USDA’s seeding intentions survey showed farmers plan to sow 1.554 million acres of canola, down nine percent from 1.714 million last year.
Wheat area is expected to be down, but that is mostly because of the smaller winter crop that was planted last fall.
The intended spring wheat area, at slightly less than 13 million acres, was 300,000 acres less than what the trade expected and about the same as last year’s area.
That provided a little support to wheat futures, which were also supported by concerns about dry weather in the U.S. Plains, where hard red winter wheat is grown.
As it often does, the market’s attention soon shifted from the seeding intentions and stocks reports back to the weather and crop conditions.
On April 6, the USDA resumed weekly U.S. crop progress reports. It rated 44 percent of the winter wheat crop as good to excellent, which is a bit better than the trade’s expectation of 42 percent, but below the five-year average for early April of 47 percent.
The Black Sea region is enjoying good spring weather, which bodes well for the wheat crop there.
Excessive rain in the southern part of the U.S. corn and soybean region is delaying the start of seeding and causing speculation that the delay could cause a switch from corn to shorter season soybeans.
darce.mcmillan@producer.com
