Slow planting and stunted prices

Farmer talk is, now that planting has been delayed, that should help prices. Well, maybe, and maybe.

Behind

Statistically, planting is now officially behind for the second week according to USDA Crop Progress Reports, out Monday each week. Last week, Ohio had 1 percent planted, and the U.S. is 2 percent done. This week they showed Ohio at the same 1 percent, with 7 percent the average. The U.S. is now 9 percent planted, but 13 is the average.

We are well ahead of the wet start last year, when Ohio was at 0 this week, and the U.S.  was just 6 percent planted. So, yes, the planting is behind normal. But, you can’t find an agronomist who thinks it is significant, as long as the planting gets into full swing the first week of May.

You can’t sell that idea to a Son of the Soil, however. They are all itching to get going, and like to have much of the crop in by the end of April.

You can find traders who find the delays interesting, if, in fact, that is the reason for small gains on the Chicago Board of Trade the last few sessions.

May corn futures put in a low of 3.70 April 14, but they have rallied, if you call it that, to a high of 3.81 1/4 April 20. On the morning of April 21, as this is being written, we are at 374 1/4, down almost four for the day, so the gains are not holding.

The soybeans have also been higher for a few sessions until this morning. The May contract shows a pattern of ups an downs with the highs continuing to be lower, as defines a downtrend.

Highs, lows

The last significant high was March 2, at 10.39. That came after a low of 9.61 3/4 Jan. 30. Moving ahead, we see a low again March 18 at 6.53 1/2, a high April 2 at 9.93, a low of 9.44 1/2 April 10 and a high April 20 at 9.81.

April 21, we are down over 2 cents at 9.75 1/4, after four days of being higher. This recent small rally in corn and beans must be taken as a technical rally or it does not make sense that both are higher. If the market were worried about corn planting, you can make a case that prices went higher.

However, the knee-jerk reaction is that delayed corn planting means more bean acres, and that should hurt prices. However, the beans are also higher. So, I have to think the small rallies mean nothing except that prices got cheap enough for the buy side of the specs to move in a little.

Another week will mean that a real weather market is possible. Another week will also get us talking in terms of July futures, as the market will start using July as a basis for prices.

Wheat prices are trading on their own, and are mostly reacting to the value of the dollar, moisture on the Plains, politics and weather in Ukraine and the stirring of chicken entrails in a secret room off the trading floor in Chicago, Just kidding about that last one, probably.

Wheat

May wheat futures put in a recent high April 2 at 5.44 1/4. Since then, we have traded lower on none of 14 days, and the price this morning is 4.97 1/2 down, 1 1/4 for the day so far.

So, we were higher after the acreage reports of March 31, which would have included spring wheat. Then, we were basically 50 cents lower fairly quickly.

This was probably because of improving conditions in our hard winter wheat crop, but you can’t ignore those chicken entrails.

Planting

Now comes that dangerous time of the year when farmers concentrate on planting and ignore the markets for six weeks. The default mode is that prices are too low and we can ignore them because when it matters, they have to improve.

In fact, improvement is unlikely in soybeans and limited in corn, although some advisory letters are fairly bullish on corn only for the end of summer. The planting season will, however, be the reason for any improvement.