Quite a few farmers in western Iowa and Nebraska were too busy last week dealing with flooding issues to worry about the March 29 USDA Prospective Planting report, but traders were certainly watching and waiting.
It’s a report that often produces fireworks, according to Don Roose, president of U.S. Commodities in West Des Moines.
The problem this year is that, while the report was still expected to provide direction to the market, there are simply too many variables to expect it to be especially accurate.
“What it does do is provide a snapshot into what farmers are thinking,” Roose says.
And most analysts expected that snapshot to include about 2-3 million more acres of corn in 2019 and 4-5 million fewer acres of soybeans. That would come on the heels of a 2018 growing season that saw soybean acreage edge higher than corn acreage in the United States for the first time in history.
This time around, the market signals are telling farmers it may be better to plant a little more corn, as corn stocks are down from last year and soybean stocks are higher. The problem is that the weather isn’t cooperating. The fall of 2018 was a wet one, meaning many fields were left with ruts and, even more important, very little fall fieldwork was done and even less fall anhydrous was applied.
Add in a heavy-snow winter and a late spring, along with flooding in recent weeks, and it could translate into a wet and late spring. That would make it difficult to get nitrogen applied before planting. The prices for anhydrous have already shot up.
But Roose says that there are some limited opportunities in the market, as long as farmers are realistic about the situation. There are opportunities to lock in $4 for December corn or $9.44 for November beans, he says. That means some farmers may want to use market tools to try to lock in a price floor for at least some of their crop.
It’s a way of getting some protection in what is looking like a challenging market situation.