Spring is here. The sun has set on the middle of Windsor Road, my local measure of the spring equinox. Night and day were the same length March 21, just like every year.
With spring comes the traditional spring factors to influence grain market prices. How many acres of corn and soybeans will we plant? What is our early spring weather?
Dry weather
So far, the weather is a mixed bag. The biggest feature is the dryness, especially in the Midwest. This can be seen as a boon to early planting, which frequently contributes to higher yield.
It can be a sucker bet for those tempted to plant too early and risk frost damage. And, it can change to wet weather at any time.
It is startling to see crop work being done in northeast Ohio. On St. Patrick’s Day, I saw three tractors working along 15 miles of Route 11 in Trumbull County and Ashtabula County: One scratched up a field where the tractor had been parked all winter. One worked ground for spring planting farther south. One was spreading manure. I saw oats being planted in Greene Township March 22.
It is as dry near my house as I have ever seen it in March. No. 2 son helped me put in a new sump pump while he was here for Christmas. We were not careful how it was oriented, and the float is catching on a rough spot and getting stuck. I have to trip it by hand since I have not been properly motivated to adjust it — another way of saying I have procrastinated for three months.
Yesterday, I remembered it had been more than a day since it was tripped, and I was surprised to find almost no water in the sump. A basement in Ashtabula County is basically a reverse swimming pool, and I had never seen a dry slump in March.
If you talk to farmers in the Western cornbelt, the chatter is about how dry the ground is. An observer in Mankato, Minnesota, told me March 22 that she was grateful to get 18 inches of snow last week and to see forecasts for rain this week. Normally they would be looking forward to doing field work, but she was grateful for the moisture.
As a reaction to the dry weather and forecasts for rain, markets had a bad day March 18 on the Chicago Board of Trade. The forecast was seen as a return to good weather and bigger crops.
Exports
We recovered from that one-day drop, however, and gained almost 19 cents for the week, driven by significant exports to China. The exports continue the narrative that USDA is not projecting enough exports, and the supply squeeze is helping prices.
In fact, the May futures have actually traded in a narrow range for six weeks, since making the new contract high Feb. 9 at $5.72. Most of the recent trading has been between $5.30 and $5.58, with the market at $5.49 the morning of March 23.
December futures have the new crop with a high of $4.853⁄4 March 8. We were trading at $4.663⁄4 March 23.
The soybean futures showed divergence between old and new crops. The old crop gained three cents for the week, but November futures were off nearly 24 cents. Exports helped the old to stay firm, but the new crop price was hurt by the idea of quick planting progress giving us a bigger crop.
Early planting
The most notable feature of planting in the last few years is the very early soybean planting which contributes to yield as much as early corn planting does for corn, as long as there is no frost damage.
Early planting is what every farmer aims for after the debacle of two years ago when the crop was record late. When I hear farmers talking about planting beans in March, I think they may be taking it too far, but I understand the desire to get started, especially if they are worried about weather staying dry.
In northeast Ohio, we will still hold off until April 20 or so because of frost fears. A return to a wet cycle will keep us from doing something stupid if it happens.
Soybean prices have made contract highs more recently than corn futures. The market is watching the export progress, which now has us at 98% of U.S. Department of Agriculture (USDA) projections for the year, with a little more than five months to go in the marketing year.
May futures had a high of $14.60 March 3, but were trading at $14.19 the morning of March 23. November futures put in the contract high of $12.653⁄4 on the same day. We are now trading the November at $12.18-3⁄4.
The wheat markets have been disappointing, as the winter damage has not been a big factor yet. We have anticipated the big freeze of two months ago to spike prices, but we have actually not seen reports of the extensive damage that we anticipated, and prices have declined.
May futures were trading at $6.22 March 23, after a high of $6.93 back in mid-January.
