After the market trades through the acreage numbers on the new crop and the stocks numbers on the old crop in the USDA reports to be released Friday morning, yield and crop condition will take center stage with most traders. Already this week, many analysts have been downplaying the importance of the acreage figures and have been focusing on current crop conditions and weather outlooks.
While Eastern Corn Belt crops have some issues including flooding and loss of nitrogen, “For the most part, the corn looks to be in very good condition,” said Darren Goebel, DuPont Pioneer agronomist. His colleague Ryan Piel says pretty much the same thing about Eastern Corn Belt soybeans, “Where the soybeans are not flooded out, the crop is coming along nicely and beginning to move from the light green to the dark green color we like to see. I think it is going to be a good year for soybeans.”
But things are not so good in Western Corn Belt states. Mike Silver, with Kokomo Grain, says the market has not picked up on that fact yet, “There is quite a contrast between crop conditions here in the Eastern Corn Belt and what farmers are facing in western states like Iowa, Nebraska, Minnesota, and the Dakotas.” Silver says the market has been looking at overall crop ratings and not digging deeper into the situation, “In my opinion, the market has not picked up on the differences between the east and the west.”
Silver told HAT that disparity is going to add volatility to the market as we move through crop development and pollination. Silver, along with other analysts contacted by HAT, believe this will begin to become a factor after the market reacts to Friday’s reports. Tom Fritz, with EFG Group, said, “On Monday traders will be saying ‘Okay, we know what the acreage is, what is the weather forecast.'” Jim Riley, with Riley Trading, says the trade is already discounting the planted acreage number from USDA since it will reflect conditions as of the first week of June.