The American market’s fixation on the weather overshadowed last week’s release of the first government estimates of seeding intentions.
The United States Department of Agriculture March 31 report showed corn and soybean acres slightly
higher than traders’ expectations.
But Mike Jubinville, analyst with Pro Farmer Canada, said the news had scant impact on markets.
“All of this took about 10 or 15 minutes to get through the trade, then it went back to the weather.”
Traders edged up wheat prices on a report of potential frost in the U.S. winter wheat region, said Jubinville.
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Iowa, central Illinois and northern Indiana are also dry, he said.
The USDA report predicts record soybean area and more corn acres.
For both crops, the report was higher than trade estimates by 200,000 to 300,000 acres, said Jubinville.
But that’s a drop in the bucket given the total projected soybean acreage of 74.9 million acres and total corn area of 77.9 million acres.
“Acreage is important, but yields are everything,” Jubinville said.
If weather pushes the average yield one bushel in either direction, that’s the equivalent of gaining or losing three million acres, he said.
He thinks the volatile weather market will last at least until July or August, when traders will have a better handle on the yield potential of crops.
Jubinville expects a lot of rallies on weather scares.
“Farmers are really going to have to pick their spots.”
He said they need to watch closely for opportunities when weather briefly spikes up prices beyond levels
dictated by short-term supply and
demand factors.
The report held some positive news for wheat markets. The 14.81 million acres of spring wheat will be the smallest since 1973.
U.S. farmers will also plant almost 11 percent less durum at 3.6 million acres. Last year, durum area shot up because of government incentives. This year, the incentive is gone, so the crop will return to traditional growing regions.
