Weekly Market Update With Tom Lilja and Progressive Ag

Easter was early in 2021 and spring planting is also shaping up to be. Its interesting to see this correlation through the years. Great uncle Frank would always plant potatoes on Good Friday. In 2016 if he would have still been alive that would have been in late March. In 2016 things were very early and the US had bumper crops. Easter was also early in 2018 with pretty good yields. In 2019 we had a late Easter, a late start to planting and below average US crop yields. 2017 and 2020 had an average Easter date in mid April with mixed results – A 2017 drought in the Dakotas, but relatively good yields in the cornbelt. 2020 showed below average yields. I should go with great uncle Frank on this one and predict good yields in 2021 since Easter was early if I look at the previous 5-year average. My only problem is that looking back prior to the last 5 years, 2002 and 2012 both had early Easter dates but both also had dry to very dry conditions and poor crop yields.

Forecasters in general are predicting a drier than normal summer for North Dakota and the Canadian Prairie Region. This is not welcome news as we didn’t get much snowcover this winter and had a dry fall. The latest weekly

US Drought Monitor released for April 6th showed nearly threefourths of North Dakota classified under D3 Extreme Drought. D4 Exceptional Drought is the worst rating and I would expect portions of western North Dakota to fall into D4 in the coming weeks.

I went back and looked at the US Drought Monitor maps for the summer of 2017 when North Dakota experienced its last drought. The biggest difference was that the eastern half of North Dakota was mostly rated D0 Abnormally Dry, D1 Moderate Drought or D2 Severe Drought. In 2017 eastern North Dakota still produced a crop. We also went into spring with good subsoil moisture from good winter snow. These factors combined with a good Russian crop, limited Spring Wheat futures from running to $10.00 per bushel like most thought would happen.

If the eastern half of the state doesn’t get adequate rain in the next month, the Spring Wheat and Canola markets could get explosive.

The market is still struggling to sort out the March 31st planting intentions report. Corn and soybean planting intentions were higher than last year, but lower than trade expectations by 2.1 and 2.4 million acres, respectively. The early spring would favor more corn acres, but dry conditions would discourage corn plantings in the Dakota’s. Trade is also expecting corn carryout to be cut as quarterly stocks were lower than expected in the March report. Weekly exports of corn have remained good, with soybeans and wheat showing a slower pace.

Kansas and Oklahoma winter wheat ratings improved 4% to 9% good to excellent which didn’t help the Kansas City Wheat complex early in the week. Texas also improved 2% while Colorado conditions were 1% lower from the previous week. Weekly US crop reports are now being published, showing the all state winter wheat rating at 53% good to excellent vs. 62% last year.

Trade has made the shift away from South American to North American weather in what is shaping up to be a wild summer for the markets. Great uncle Frank did state that even in the dirty 30’s, eastern North Dakota hooked some rains and things weren’t “as bad as out west”. We’ll know how the potatoes are doing by July.

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.