The crop progress report from USDA on Monday should show an increase in the overall planting progress pace for several states across the Corn Belt. As the market balances its focus between more farmers getting the opportunity to plant, and the reality of saturated soils and more chances of rain and snow in the northern tier of states, farmers decisions on what and when to plant this year are much different than 2022.
It’s hard to forget last year’s planting debacle in North Dakota and South Dakota. Continued rain pushed the start of planting back to late May. Last year, farmers had every incentive to plant, even if that meant to go past crop insurance dates and take on added risk. Tommy Grisafi of Advance Trading says that’s because commodity prices last year encouraged more farmers to plant.
“Last year at this time, we were $7 December corn on our way to $8 December corn, so those farmers planting on June 6 in North Dakota last year, were planting corn hoping and praying that they had a nice fall, and they did, but that’s not always normal in North Dakota,” says Grisafi. “So for how expensive this crop is in the northern plains, North Dakota, Minnesota, South Dakota up in Canada, are they willing to put the highest price crop they’ve ever planted into the ground very late and a lot of things have to go right for that to go well?
Grisafi says last year, farmers planted everything but corn, since the price of soybeans, canola, sunflowers and a host of other crops were so strong.
“Now, the price of all of those things, edible beans, barley and everything, have calmed down tremendously. There’s not as much motivation to put in a crop and it not go well. And so financially, it could be a disaster,” says Grisafi.
Kristi Van Ahn-Kjeseth, COO at Van Ahn & Co, says farmers in the northern plains aren’t getting excited about planting crops like spring wheat due to current prices. She says for wheat, as well as corn and soybeans, there are a couple major price levels that farmers need to watch.
“Right now, we’re focusing in on this $5.50 level for December corn. It’s a level that needs to hold,” she says. “You look at recent lows just below it, and so that’s going to be a watch point for us to see if we can stabilize here. We know we generated a good crop insurance price, but that only covers so much when you look at it.
She says the key line to watch for soybean price levels is $13.
“We’ve came down and tested it multiple times, and it just seems to be holding pretty strong. So, we’re going to trust that level.”
Van Ahn-Kjeseth points out it’s a different story for spring wheat since there’s currently not a lot of potential for profitability with spring wheat this year. And if the wet weather pattern continues, spring wheat acreage could drop even further.
“Last year, they did have a really, really late spring. And they took a gamble on it, put it in because spring white spring wheat was so high priced. It actually worked out for them. They had great yields when you look at spring wheat, but this year is a little bit different. The profitability is not so much there. And I think you’re going to look at a producer saying where is the profitability? And I think you’re going to see those farmers start on that corn and see what they can get in for corn first.”
She says the prevent plant rules also changes, where farmers can now graze it. She thinks that may play a big role in more farmers possibly utilizing the prevent plant option, since they can rent that ground out for cattle grazing.
