Planting pace is slightly behind schedule and corn acres might get switched to beans.
Around one-third of the expected soybeans have been planted this spring, according to USDA. Soybean planting is now 33% complete, up just 13% on the week and 5% behind the five-year average.
Some traders are starting to get concerned about planting progress, says Kevin McNew, president of Grain Hedge and Geograin. "North Dakota, Minnesota and Wisconsin will also be important to watch in terms of soybean sowings," he says. "This week’s report showed just 16% of Minnesota, 5% of North Dakota and 8% of Wisconsin soybean acres are planted."
This week, November soybeans traded out near the lows of the day yesterday after failing to break out of the highs set on April 29, McNew says. "The failed breakout is typically a very strong warning signal that a change in trend could be near, but the recent volatility in the soybean market needs to be taken into consideration."
The commodity markets continually watch planting progress for cues to the final crop. But, what cues to the unplanted acres send?
Bill Biedermann, co-founder of Allendale, Inc., says prevent plant acres came in around 7- 8 million acres last year. "When USDA did the Planting Intentions report this year, they never added those back in," he says. "There’s normally 4 million ghost acres that get tossed around all the time, so let’s assume 4 to 5 million acres of last year’s prevent plant acres get planted this year."
But, he says, more than 10 million acres in North Dakota and Minnesota that are struggling to get planted in corn and those acres could shift to soybeans.
"We are expecting a carryover of 300 million bushels and you add another 1 million acres of beans – it’s a devastating price outlook if we get any kind of yield at all," Biedermann says. "This is very serious. Farmers really need to take a minute and look at this one paper. They will realize the risk they are standing in front of."
He says since the prevent plant price is low this year, farmers will likely go ahead and plant the soybean acres.