Market Insight: Weather pressures U.S. corn

The U.S. corn market is starting the week with a negative tone, due to a slight improvement in the
weather outlook. The five- to seven-day forecast shows dry conditions over most of the Corn Belt,
which had previously experienced excess moisture delaying planting.

Monday’s USDA crop
progress report also delivered a bearish surprise, putting seeding at 51 per cent complete, ahead of
most trade expectations. Given the wet conditions that prevailed over the past week, this
means farmers went ahead and mudded the crop in.

Oats seems to be following the lead of corn, and will continue to do so over the next few
weeks until the market can get a better sense of how big the Canadian crop could be. High
prices during the past few weeks will have caused some degree of last-minute acreage-switching into oats.

Wheat appeared to have found some support last week, but the trade remains choppy. New-crop Minneapolis futures are pressured by the arrival of moisture to the Northern Plains, while old-crop spring wheat continues to move higher as mills scramble to buy the last remaining bushels of protein wheat around.

Oilseeds

Soybeans started the week higher then closed lower, then opened higher on Tuesday,
pointing to a likely continuation of the uncertain situation in this market due to ongoing
political issues in Argentina which is limiting exports. There has been no change in the strike
situation in recent days.

U.S. planting progress came in at just 11 per cent, versus 26 per cent at this time last year, which was initially

seen as bullish but will be quickly overshadowed by the longer-term forecast. Drying
conditions over the next week should give farmers an opportunity to catch up.

Canola’s losses on Monday were led by bean oil, and sharp drop in the energy complex. For
it to move independently higher, or to break out of the current sideways range, we would
need to see a pickup in export sales or continuing strength in the energy market.

— The FarmLink Market Insight was researched and produced by FarmLink Marketing Solutions, a marketing advisory service for Prairie farmers, and is published here with permission of the authors.

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