Based on the chatter around Wednesday’s WASDE reports, it seems as though traders and farmers are living in two different worlds. While the trade braces for big crops, U.S. farmers are wondering whether it’s worth replanting their soggy fields.
In Missouri, a Carroll County farmer vented on AgWeb’s Crop Comments section about the wet weather and the latest Crop Progress numbers from the USDA.
“Here we go again!! More rain,” he wrote. “Did finish planting corn on May 7 and haven't been in the field since. Lot of guys around here didn't get started or not done with corn. They claim 21% of beans in Missouri are planted, but in this part of the state only 3% are planted. USDA knows best, go figure. Will be a lot of prevent plant corn and late planted beans. There goes the record crop that Board of Trade claims is going to happen.”
Traders are watching the soybean situation closely. Before planting, many expected U.S. farmers to plant a historically high number of bean acres in 2015, thanks to low corn prices and high input costs.
But those soybean supplies may not prove as large as some feared. Planting is behind schedule, with 79% planted, according to the latest USDA Crop Progress numbers, and the weather has not been cooperative.
“Early this spring, soybean planting progress was off to a ferocious start, but persistent rain for the past month caused farmers to lose their lead on the five-year average,” noted Marc Schober on Farmland Forecast. “Now, as the planting window comes to a close, farmers are being forced to plant in less than ideal conditions.”
As farmers fret about their wet fields, strong overseas demand for soybeans has persisted, despite the dollar’s strength. After taking that into account, one set of estimates have the trade lowering its expectations for old-crop bean carryover by 11 million bu. and dropping new-crop by 13 million bu., which could mean a bullish day for soybeans.
Listen to analysts DuWayne Bossey and Andy Shissler discuss the weather situation and the market on U.S. Farm Report:
The trade’s view of corn is a little different.
According to one set of trade estimates, the carryover is expected to rise to 1.859 billion bushels for old-crop corn and 1.779 billion for new-crop corn. That could be bearish news for corn, but some farmers and analysts think the weather will end up having a larger—and more bullish—influence on acreage and yields than the market acknowledges right now.
“While corn planting is still near the 5-year average, low prices this year have some questioning the incentive to get the last 5% of the corn crop planted,” said Ted Seifried on The Ted Spread. “Heavy rains in some of the furthest behind areas in Missouri and Kansas are not helping corn get planted either. With the USDA estimating the smallest corn crop since 2010, any loss of corn acreage could have a significant impact on the balance sheet.”
Is the market accounting for all that rain? It’s doubtful, according to analysts on U.S. Farm Report Saturday.
“The market’s not going to care (about rain). I feel their pain as a producer myself,” said DuWayne Bossey of Bolt Marketing. “We’re back home, we’re trying to plant the last of our soybeans too, but what the market is looking at is a Drought Monitor that shows no drought. So there’s no risk of drought changing the market outlook. They see a big crop and big yield potential. Farmers are frustrated because they’re hearing that traders think it’s just an idea crop coming, and farmers feel like, ‘Heck, look out my window and it’s not ideal at all. It’s not like last year for many guys, but the market just does not care because of factors I mentioned.”
Andy Shissler of S&W Marketing agreed.
"The market doesn't go up while it rains," he said. "Never has, never will."
AgWeb will have complete coverage of the June 10 USDA reports starting at 11 a.m. Central.