Since this is the first week of May, it should not surprise any market watchers that weather dominates trading views of the grain markets. It has always been this way, and always will.
What has changed is the view of the weather. A month ago, the market was talking about wet weather that would potentially slow the start of planting. Traders built a little delayed-planting premium into prices.
Then, the weather changed dramatically, and so did the markets.
Large volatility has characterized recent prices as traders reversed themselves on the weather and now are focused on a record pace of planting.
Monday, after the close of trading, USDA released the weekly Crop Progress Report. It was no surprise that fast planting continues, although we did not expect that this time last week. At that time we had four or five days of rain forecast for the region. In fact, the rains were light and spotty. Some field that were worked in northern Ohio looked a little juicy, but they were worked. In other places the dust flew.
As we drove into Jamestown, Pa., last night, my wife watched a planter turning in a cloud of dust and asked who was farming there. I told her who had been working that ground, but that I couldn’t tell if it was them because there was too much dust!
Dust, in Northeast Ohio, in early May.
Since farmers, and psychologically I am one, can always find the dark lining in the cloud, we can now start worrying about a hot, dry year!
Coffee shop talk would be that this is starting out like 1988, except that it is faster than 1988, and the coffee shops don’t have any farmers in them right now. The coffee is coming out of thermoses tucked in the corner of the cab or carried to the field for tailgate suppers.
How fast are we? USDA reported Monday afternoon that the U.S. was 68 percent planted, breaking the 2004 record for the week of 63 percent. The market that year was not thinking of drought, but of early planting promoting record yields. That did happen, with over 160 bushels per acre for the country.
Ohio is at 64 percent, planted as of Sunday night, which means we gained 19 points in a week and the U.S. gained 18 percent.
Last year, Ohio was only 12 percent and the nation was 32 at this time. The average for Ohio this week is 35, with the U.S. normally at 40.
So, markets are defensive, with corn down over a nickel at one point Monday, finishing down almost 3 cents. Overnight, we are down another 2 1/2, and there is no other reason.
The fear of a another record crop will undercut the corn until something fundamental changes.
And, of course, record corn planting pace results in fast planting of the soybeans. This is the first week for USDA to report bean planting, and the numbers are impressive. The U.S. is 15 percent done, compared with 5 percent last year and an average of 8 percent.
Ohio is ahead of that, with the beans 23 percent planted. Last year this time we had only just started, at 3 percent. The five-year average is 12 percent.
I am having a geezer moment, remembering when we planted corn anytime we felt like it, mostly in the last half of May. We thought early June was fine for beans. We thought the frosts would kill the beans, but now we plant beans before corn sometimes and expect them to shake off the frost and thrive.
I also remember those tailgate parties in the field, with big pots of soup and chili and sandwiches and slabs of pie and three little kids running around, excited to see Daddy. I got to see one of them work college summers on a big farm, and that memory is bittersweet.
“If you had kept farming,” he told me, “I am the one who would have farmed with you.”