Here on our corner of the North Coast we always say, if you don’t like the weather, stick around a few minutes.
I remembered this as I was mowing lawn and tilling my garden last night. I have never done this in early April. I have frequently not done this until May. Yet, it snowed off and on for several hours Saturday!
Farmers have planted oats in the last few days, and one Hiram farmer has planted corn. His neighbor dropped a dime on him, and I won’t mention Jack’s full name in case he ends up replanting and gets embarrassed!
Still, there is this feeling of a really early spring, and the thought that Jack is right. I had a maple tree in emerging from bud two weeks ago. The Northern Spy beside my desk window is leafing out. Usually this happens the first week of May, sometimes later.
The grape growers are freaking out that we will get a big freeze now that they have grapes emerging from winter too early.
Enter USDA report
All this and USDA has marked spring with a Planting Intentions Report that is frankly confusing.
In the nearly two weeks since its release, we have seen corn prices decline and soybean prices make small gains. Part of the confusion in the corn is that there was no surprise. USDA says we will plant 88.8 million acres of corn, which is up 3 percent from last year.
That could be thought to be negative to prices, but it was already in the market. The traders expected the increase, supposedly.
Much of the increase comes from what we have been talking about, which is the wheat that did not get planted. The wheat acres are going to corn in a big way in states like Illinois, Kansas, Missouri and Ohio. Soybean acres will gain less than 1 percent to 78.1 million acres.
But, add that to the corn and we have the highest acres on record for spring planting. So, maybe those numbers are scary, even if we were expecting them.
Ah, yes, the weather
Aside from the wheat acres moving to corn, the market has focused on the wet spring. As I was discussing this with a farmer yesterday, maybe this factor got too much attention early. Maybe the biggest reason for weak corn prices is not the acres we expected, but the better weather we did not.
All of a sudden tractors are running everywhere and delayed planting is off the Board thinking right now.
So, if we are getting a good start to spring and we are planting almost 89 million acres, maybe the market is right.
Ahead of the report I feared that if the market did not digest the numbers well, we did not yet know what really cheap corn was. After the report we made a new recent low, dropping nearly 8 cents after the report, to 3.43 1/4 May futures. That is bad, but it is not a free-fall.
We have traded near that low six days now, but with an interesting two-day excursion into market madness. That would be last Wednesday and Thursday when we gained a dime the first day, then gave back 8 1/4 cents the next day.
This is the kind of confusion thrill I could do without.
So, corn is bouncing on the low, but the soybeans still have an uptrend in place. The uptrend is measured by charting the cycle lows. We had 9.11 May soybean futures Feb. 4, then 9.21 3/4 on March 15, and finally 9.30 1/2 on March 31, after the report. We are now trading at 9.58.
The small increase in soybean numbers may have surprised a market that thought the wheat acres would more evenly be split in the corn and beans instead of mostly going to corn. So much for thinking the high corn production costs would favor beans.