The grains complex continues to be subject to weather forecasts as planting delays are weighing heavy on the minds of both traders and producers alike. As the calendar moves forward and we continue to see snow in the fields, it’s more than just frustrating. While Mother Nature and Ol’ Man Winter toy with our emotions, there is positive belief that the snowmelt will occur appropriately and soil temperatures will warm up quickly.
That being said though, any additional precipitation once the snow disappears would not be welcomed. Above-average spring run-off conditions are anticipated by the majority of municipalities across Western Canada. Drew Lerner of World Weather Inc. expects precipitation to be more likely in the eastern part of the Prairies. That doesn’t help farmers in the Red River Valley as the U.S. National Weather Service doesn’t expect the seasonal “flooder” to crest in North Dakota until mid-May, meaning it will be the end of May before it crests in Manitoba.
The USDA recently told us that only four per cent of the U.S. corn crop has been planted, well behind the 26 per cent pace last year and the five-year average of 16 per cent. According to University of Illinois Agriculture Economist Darrel Good, for the corn crop, one shouldn’t be too worried as only something planted after May 20 is really considered late. Staying with the academics, Perdue University professor Bob Nielsen says that yield potential declines after about May 1 (down 0.3 per cent per day in early May to about one per cent per day by the end of May).
The college boy’s opinions differ from long-time commodities analyst Dennis Gartman who believes that as the days and weeks pass, more corn acres will be traded in for soybeans. It’s already been suggested that 500,000 to one million acres in North Dakota that were once pegged for corn, will now being something else (most likely cereal crops). This is also expected across the 49th as more oilseed crops may be switched out in favour of the cereals. The market is starting to price this in as already new crop barley (October and December) on the ICE Canada exchange dropped below $200 a tonne.
When push comes to shove, no one likes to rush but the weather will surely affected both planting and the development of the crop. One-third of the U.S. winter wheat crop is rated poor to very poor while only eight per cent of the crop is headed (compared to 42 per cent last year and the five-year average of 19 per cent).
Warmer, drier weather should help speed up crop development but just like warmer weather makes the fields look ready to get in to, the reality is that things can still be not that great — you might get stuck.
Brennan Turner is originally from Foam Lake, Sask., where his family started farming the land in the 1920s. After completing his degree in economics from Yale University and then playing some pro hockey, he spent some time working in finance before starting FarmLead.com, a risk-free, transparent online grain marketplace. His weekly column is a summary of his free, daily market note, the FarmLead Break- fast Brief. He can be reached via email (email@example.com) or phone (1-855-332-7653).