Now that USDA has published a host of reports—including quarterly grain stocks and WASDE figures—analysts and producers will pay close attention to spring planting and possible wet weather in the eastern Corn Belt.
"I know we can plant corn very quickly," notes Sue Martin, Ag & Investment Services, in an interview on the U.S. Farm Report Market Roundtable. "But if you put a 5 in front of this calendar date and we don’t have very much corn in the ground, the trade and even the producer, too—they’re all going to start to reminisce about last year. Yes, they put it in fast, but we had less of it to put in because of all the prevent plant. And all that’s going to come back. I think it’s just going to put a floor under this market. Until we get that crop pretty much planted, then we can start to have the expectations of good production."
While farmers in some parts of the U.S. already are entering the field, the eastern Corn Belt is bracing for wet weather. In reality, both the trade and farmers will be waiting for months once planting occurs to get a better sense of where the market is headed.
"The May WASDE, what are we going to see? It’s going to our first look at ’14-’15," explains Peter Meyer, PIRA Energy Group. "We know what the acreage numbers are already. Those aren’t going to change. What are they going to start at, 165 in corn and 45 in beans? OK, I get it, that’s where they’re going to start. From here, though, as far as what you’re going to see on paper, you’re going to have to wait until the end of June when you’re going to see the quarterly stocks and the real acreage numbers. Boy, there’s a lot of space to be filled between now and then."
While the timing of El Nino will be critical to the equation, Martin says, there are several reasons to think that the market will move higher for both new-crop corn and soybeans.
"I look at the December corn, less acres here and less acres overall production out of Brazil, even though they’re going to export some," she says. It's even possible December corn could take out last year's high and move to $6, Martin adds.
Click the play button below to watch the complete U.S. Farm Report Market Roundtable discussion beginning at about the 7-minute mark:
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