Cold weather and snow storms slow early planting efforts
The Northern Plains and parts of the Corn Belt are unseasonably cold. Some major snowstorms were reported through the week which makes any planting difficult. Even in areas not hit by snow, cold soil temperatures prohibit planting. The U.S. Department of Agriculture's weekly reports confirmed these planting delays — spring wheat efforts are basically halted and corn progress was basically unchanged from the previous week at just 3 percent completion.
While the slow start to planting does not mean the crops will be in bad shape, it does raise a few questions. Will the late start to planting cause some farmers to change their planting plans?
When the summer heat hits, will the later-planted crops be able to withstand the higher temperatures if they are underdeveloped? Will the crops be ready for harvest ahead of cooler fall temperatures or an early frost?
All of these questions are impossible to answer in mid-April. This is why market volatility in the spring is so common each year regardless of the previous year supply situation, with 2018 following the same trend.
Wheat markets remain volatile. Kansas City and Chicago futures broke on improved weather forecasts for the Plains while Minneapolis futures had fallen and risen in sympathy. Markets ended the week on a decline as extended forecasts show a return of rains at the end of the month in the Southern and Central Plains.
Spring wheat planting is lagging the normal pace by a significant margin. The weekly Crop Progress and Conditions Report showed just 3 percent completion from 2 percent a week ago. The five-year average pace is 15 percent. The U.S. winter wheat crop continues to see very poor conditions, even with recent rains to improve drought conditions. Thirty-one percent of the crop is now rated good to excellent from 30 percent a week ago. But 37 percent is rated poor to very poor compared to just 13 percent a year ago. Look for these condition ratings to improve in the coming weeks as the rains in the Central Plains should help considerably.
The Minneapolis durum price quote remains unchanged, holding at a weak level for the last several weeks. Planting efforts have not really begun given the tough weather conditions in the Northern Plains. Strategie Grains released their monthly crop estimates this week. A forward estimate for European durum production totaled 9.1 million metric tons.
Canola futures have been strong despite weakness in market-leading soybean oil. Some causes for the surprise rise in the market include fear of planting delays, some currency weakness and short covering. The market had been cautious against rallying too much, as that would make canola uncompetitive with rival soybean oil. And the market is well-supplied from the 2017 crop. However, the cold, wintry conditions in the Prairies are raising concerns of late planting, which lent support. Additionally, the Canadian dollar had been strong, but weakness late in the week allowed for some price support in the canola market. Do not expect canola prices to continue to surge if soybean oil holds steady or declines further as too much of a premium over soybean oil would be corrected quickly. But continue to follow weather for its impact on planting efforts.
Peas and lentils
There has been little news in the pulse markets of late. The USDA purchased 20,700 metric tons of pulses for food aid for shipment in May and June. Tenders are out for another 760 metric tons for shipment in June and July.
U.S. barley planting progress has been impacted by the cold weather conditions. The USDA reported 7 percent planting completion compared to 23 percent for the five-year average. Last year was slow at 12 percent completion, but this year's pace clearly shows just how difficult it has been for farmers.