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Are the markets pulling one over our heads? They get us all excited yesterday with corn and soybeans roaring limit-up after the USDA report. Today? The markets turn mostly lower as though they knew it’s April Fools’ Day and are saying, "oh wait, just kidding!"
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A quick and dirty summary from yesterday’s USDA report was that intended acres for soybeans and corn are higher than last year but not nearly as high as anticipated. Nothing surprising was released about the overall wheat picture as numbers came in right around trade guesses. Although take note, there was a sharp increase in anticipated flax acres (up 43% from last year) and a large cut in oat acres (down 17%).
Soybeans: Wednesday’s report stunned the markets when it announced just a small 5% increase in intended bean acres over last year. Pegged at 87.6 million acres, this was a far cry from the 89.9 million acres many expected leading into the report. After the news, soybean markets soared higher, closing limit-up on the day. This confirms that soybean markets will probably try to buy more acres with higher prices to alleviate the tight supply situation. You can see it trying to do that today with some new crop futures moving higher. Weather will no doubt play a crucial role moving forward.
Canola: I don’t predict we’ll see a big increase in Canadian acres and there was a small increase in acres in the U.S. Even so, canola will look to soybeans to lead the way.
The market closed very strong after Wednesday’s report was released and is now giving back some of much of those gains. New crop bids are holding up better than old crop. Canola bids have taken a big step back from where they were just a couple short weeks ago. Briefly, we saw old crop bids get back above $18/bu and $14.40/bu bids being offered for the Nov-Dec timeframe.
In other canola news, Canada’s Pest Management Regulatory Agency (PMRA) decided that the current use of clothianidin and thiamethoxam in our seed treatments can continue to be used as it “does not pose an unacceptable risk to aquatic invertebrates.” Phew! I can now breathe a sigh of relief. Damages caused by flea beetles on my farm are a major cause for concern every year and I absolutely hate spraying insecticides—which I believe would do more harm to the environment—rather than using these seed treatments.
Wheat: Bearish news. Yesterday’s report pegged the total intended wheat acres to be planted at 46.4 million acres which is higher than the trade guess of 44.9 million acres. Despite this news, wheat markets went along for the ride and followed corn higher this Wednesday. Today, it's giving back those gains.
The USDA increased its seeded 2021 winter wheat acres to 33.1 million acres which were higher than anticipated. These acres are pencilling in at about 9% higher than last year’s numbers. On the contrary, the spring wheat acres are down about 4% at 11.7 million acres. Now everything hinges on the weather.
We are also seeing some CP+ programs on for old crop April del. of $8/bu.
Corn: Corn acres are up at 91.1 million acres which is just barely more than last year. Meanwhile, trade expectations were much higher at 93.2 million acres. This shocked the markets and shot futures limit-up.
Barley: We have been watching barley bids soften over the past few weeks. This week, certain grain buyers decided to completely pull some new crop bids (for barley destined for export) due to uncertainty in export demand and a jump in ocean freight rates.
Looks as though there are many countries for importers to buy barley and with a higher acreage expected to be grown here, do not assume any large increases in bids.
Peas: Some softening in bids offered but most have held steady. Overall, the pea markets are pretty quiet.
Around the farm: The weather is as wild as the markets here; from a snow day (with no school or buses running and high winds) on Monday to walking around in a T-shirt today. I am thankful to have received additional moisture as the spring creek that typically runs in front of our house hasn't even run this year (less snow).
Other than watching markets and doing office work, we are cleaning the yard and looking at a few more improvements to make to our seeding equipment. Anyhow, I hope you all have a great Easter with friends and family … and that the Easter bunny comes to lay you a golden egg this year.
Hoppy Easter everyone! Cheers!