Market Analysis

The USDA surveys US producers during the 1st half of June to see if their initial planting intentions were carried out each year. This year’s above normal April temperatures in the W Midwest got this region’s plantings off to a good start. However, dryness in the N Plains from minimal winter snows was problematic for this region, delaying their spring wheat & small grain seedings. Cool-weather settling into the C. The US during the 1st half of May kept IN, OH & MI planting sluggish. The Delta had a wet spring for the 2nd year in a row shifting a few crops around in the region. Overall, 2021’s US planting season generally followed a normal pace. However, this year’s below normal rainfall intensifying into a drought in the N. Plains likely having an impact on some producers planting decisions. The trade’s focus on next week’s USDA acreage report will be on the US corn & bean plantings. This year’s March intentions didn’t reveal the big increase in these two crops seedings that many people had expected given this spring’s higher prices & the 10 million acres in last year’s USDA prevent planting program. In the 8 major crops, this spring’s intentions rose to 251.7 million acres, up 6.86 million from 2020. Winter wheat’s 1 million higher seedings vs January and 2.66 million higher plantings from 2020 was the surprise. Chinese demand & strong new-crop price offers also increased sorghum planting in March and could up this crop’s area further on June 30. China’s second round of US corn purchases prompt some trade analysts to project a substantial jump in US corn plantings. However, the limited remaining prevent plant acres, the high cost of corn inputs (fertilizer) and dry subsoils in the western US has us projecting 93.05 million corn level and a 88.75 million soybean area for next week. These 3.06 million higher acres will boost 2021’s 8 major crops plantings to 255 million, the highest level in 7 years. Interestingly, since 2007, corn’s March to June area increases have been limited to about 2 million while soybeans increases have been about 1.5 million acres.

What’s Ahead

Next week’s US 2021 planting levels will be important barometers for the upcoming crop year. However, given current tight old-crop carryovers and the likely strong demand as the world recovers from coronavirus pandemic makes strong yields also important. The location and the amount of current rainfall in the Midwest will set the tone going forward. Hold old-crop soybeans & 2021/22 sales at 20-25%.