Weekly Market Update With Tom Lilja and Progressive Ag

The last time the corn and soybean markets were this volatile was back in the 2008-2013 timeframe. A poorly valued US Dollar after the economic recession of 2008-2009, Ethanol demand and less than ideal weather were the key factors. I remember there was a marketing firm one of those springs that estimated US farmers would plant 8 million more corn acres from the previous year as the profit margins greatly favored corn. In the end, what that firm forgot was that there is too much risk in those kinds of drastic changes to a rotation from pest and disease management, input costs, labor etc. Farmers again proved all the experts wrong in the March 31st planting intentions report as they viewed planting 7 million more acres of soybeans vs. last year as too much of a rotational change.

The Planting intentions report was considered bullish with corn plantings expected to be 2.1 million acres less than trade expectations at 91.1 million acres vs. 90.8 million last year. The “I” states and Nebraska all showed intentions of 96 to 97% of last year’s final corn plantings or 1.3 million acres less while the Dakota’s which saw a lot of prevent plant last year were up a combined 2.0 million. Soybean in

tended acreage was 87.6 million vs. trade expectations of 90.0 million vs. 83.1 million last year. All wheat intended acreage was 46.4 million vs. trade expectations of 45.2 million. Spring wheat acres which are included in this total are expected to be down 4% to 11.7 million acres. The winter wheat number was a head scratcher as January winter wheat numbers complied from fall planting are typically final, so maybe US farmers planted 1.0 million more acres of wheat in February??? Other crops vs. last year included canola +16%, sunflowers -29%, Dry Beans -11%, sorghum +18%, cotton unchanged.

The market reacted with limit up moves in both the corn and the soybean complex. New crop contracts reached new highs of $4.93 and $12.85. The market is nervous with projected tight carryouts. Farmers stuck to their rotations and aren’t too enthusiastic about sticking their necks out with drier summer forecasts. Now the corn and soybean markets are poised to run to entice them to take some more risk. With what is setting up to be an early spring, corn should gain above the 91.1 million acre estimate.

Quarterly stocks for corn as of March 1st, 2021 were 7.701 billion bushels vs. expectations of 7.767 billion bushels vs. 7.952 BB last year. Soybean stocks were as expected at 1.56 billion bushels and wheat was above expectations at 1.314 billion bushels. This gave an extra boost to corn futures in April 1st trade.

Kansas crop ratings improved 5% to 50% good to excellent, Texas crop ratings declined 1% to 28% g/e, Colorado declined 5% to 28% g/e, 40% fair and 32% p/vp. Oklahoma declined 1% to 61% g/e, 24% fair and 15% p/vp. The improvement in Kansas ratings combined with higher stocks number and a strengthening US Dollar pressured the wheat complex after the report.

Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Progressive Ag Marketing’s Research Department.