Mark's Market Talk
Apr 03, 2023
The big report day has come and gone and now we will start trading the US weather as we dive into spring planting. The acreage report didn’t throw out any huge surprises, but it did confirm what the trade had expected. They put corn acres at 92 million acres which was at the upper end of the guesses while the expected bean acres came in at 87.5 million acres which was below the average guess of 88.2 million. So that part of the report was a little bearish to new crop corn and friendly to new crop beans. The real action came in the quarterly stocks report which showed that current supplies of both corn and beans are tighter than expected. This sent old crop prices higher follow the report and both settled higher for the day. For the week May corn was 17 cents higher while December was up 6. May beans ended the week 77 cents higher while the Nov contract was 46 higher. Old crop basis should remain strong into the summer months as most end users lack coverage at this point. Those that have old crop on hand should see good prices coming your way. New crop beans have new life following Friday’s report. However, the late spring in the northern plains could force corn and spring wheat acres into bean acres and the numbers could be a lot different when the USDA makes their update in June. It will all depend on the weather they get for the next 6 weeks and how fast their snow melts. The bearish corn acre report may put pressure on new crop corn prices in the near term, but again it will be the planting progress in the northern plains that will lead the market. The tighter stocks report will also add some incentive back into the corn market as we will need to plant over 91 million acres to hold our supply to usage numbers together. If you add the projected corn, bean, and wheat acres together it totals 229.4 million acres. The past 5 years we have seen that total average 228 million acres including prevent plant acres. For the most part the secondary crop acres did not change much, 900,000 more acres will be in the CRP next year, so we don’t gain from that. The question becomes where will the acres come from to put these crops on. We average 5 to 6 million prevent plant acres most years. We have been as low as 1.6 and as high as 17 million acres. With the snowpack and cold weather to the north it leads you to think we may easily have above average PP acres tis year. At the end of the day the reports looked cut and dried. But there is much more to play out this spring and it will probably be anything but normal.