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US planting off to a strong start amid developing dryness
The release of the second USDA crop progress report of 2021 yesterday pressured US grain markets to ease back. The report highlighted US farmers had made good progress in maize and spring wheat planting. But, over a third of US cropland (topsoil and subsoil) were ‘short’ to ‘very short’ of moisture. This is a worry given the short-term weather forecast is relatively dry.
This dry weather will also provide a clear window of opportunity for farmers to push on and make good drilling progress. Already this early on, maize planting progress at 4% is ahead of the five-year average, if only by 1%. Spring wheat at 11% drilled is also ahead of the five-year average (6%) as of 12 April. Whilst the drilling campaign is only beginning, good progress and a clear forecast will offer pressure to global grain prices as the increased maize area gets drilled without disruption.
US fund positions eased back their bullish view very slightly last week. This was likely on account of the ideal drilling conditions and a degree of profit-taking. These positions are a typical marker for overall US market sentiment. As of 12 April, 21.5% of total positions in maize were for a net-long view (bullish). This indicates an opinion that prices will remain supported over the short-term.
As we can see, 2021 moisture content is currently at the lowest in the last four years. This is within normal levels but could develop into a yield-affecting issue if dryness persists through crop emergence.
Over 70% of the state of North Dakota is considered to be in ‘extreme drought’ condition currently. The state produced 8.5Mt of wheat and 6.2Mt of maize in 2020. This dryness could become a real issue for the state if rains do not arrive soon.
A dry forecast for the Midwest over the next couple weeks is a double edged sword. On one hand, the ability to make good drilling progress will offer a degree of pressure to global grain prices. But, should dryness persist and cause concerns for crop emergence then a degree of support could develop for global grain prices.
https://ahdb.org.uk/news/us-plantin...rt-amid-developing-dryness-grain-market-daily
Join the 3.5K people who subscribe to our Grain Market Daily publication here - https://ahdb.org.uk/keeping-in-touch
The release of the second USDA crop progress report of 2021 yesterday pressured US grain markets to ease back. The report highlighted US farmers had made good progress in maize and spring wheat planting. But, over a third of US cropland (topsoil and subsoil) were ‘short’ to ‘very short’ of moisture. This is a worry given the short-term weather forecast is relatively dry.
This dry weather will also provide a clear window of opportunity for farmers to push on and make good drilling progress. Already this early on, maize planting progress at 4% is ahead of the five-year average, if only by 1%. Spring wheat at 11% drilled is also ahead of the five-year average (6%) as of 12 April. Whilst the drilling campaign is only beginning, good progress and a clear forecast will offer pressure to global grain prices as the increased maize area gets drilled without disruption.
US fund positions eased back their bullish view very slightly last week. This was likely on account of the ideal drilling conditions and a degree of profit-taking. These positions are a typical marker for overall US market sentiment. As of 12 April, 21.5% of total positions in maize were for a net-long view (bullish). This indicates an opinion that prices will remain supported over the short-term.
As we can see, 2021 moisture content is currently at the lowest in the last four years. This is within normal levels but could develop into a yield-affecting issue if dryness persists through crop emergence.
Over 70% of the state of North Dakota is considered to be in ‘extreme drought’ condition currently. The state produced 8.5Mt of wheat and 6.2Mt of maize in 2020. This dryness could become a real issue for the state if rains do not arrive soon.
A dry forecast for the Midwest over the next couple weeks is a double edged sword. On one hand, the ability to make good drilling progress will offer a degree of pressure to global grain prices. But, should dryness persist and cause concerns for crop emergence then a degree of support could develop for global grain prices.
https://ahdb.org.uk/news/us-plantin...rt-amid-developing-dryness-grain-market-daily
Join the 3.5K people who subscribe to our Grain Market Daily publication here - https://ahdb.org.uk/keeping-in-touch
