The calendar says spring is just around the corner, but a look out the window says it may be quite a while before the planters roll. That reality could soon be a factor for the grain markets.
“We’re four to six weeks away from planting season, and we’re still talking about major blizzards in the forecast,” says Karl Setzer, director of risk management for Citizens LLC, a grain elevator company based in Charlotte, Mich.
Many Midwestern farmers struggled through a wet fall in 2018, which means less fall tillage was done and only about a quarter of the usual amount of anhydrous was applied. For those areas, more time may be required this spring. A late spring with wet fields could complicate that.
Economists at the USDA Ag Outlook forum last week predicted that farmers would plant more corn and fewer soybeans in the United States this spring. The agency threw out numbers like 92 million corn acres and 85 million soybean acres, a fairly dramatic change from 2018.
“I don’t have any faith in that at all,” Setzer says of the outlook numbers.
And that’s where the weather and field conditions come into play. A late, wet spring could push more acres to soybeans in parts of the Midwest. Cost of production could also be a factor as farmers look to cut costs as a way of making ends meet in difficult economic times.
And until the weather changes, it may be difficult for the USDA to get a handle on planting projections this spring ahead of the first projected acreage report at the end of March.
With those items in mind, Setzer says it will be important for farmers to look at the cost of production this spring. He cautions them against cutting back too harshly on crop inputs, but says they need to be very aware of all their production costs.
The trade, meanwhile, is busy watching South American production and talks with China. There is hope talks with China will produce some kind of trade agreement, but Setzer says recent announcements by China to buy some soybeans weren’t enough to make any meaningful difference in the market.