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UPDATE for March 29th 2023

More Corn Sold to China, Talk of Planting Delays & Northern Lights

Friday, March 31st the USDA will release another highly anticipated report for many reasons:

• It gives an us an estimated amount of grain that is remaining at commercial facilities, and on the farm.

• This shows how tight current stocks are and if price rationing is needed.

• The March 31st report gives us the first official planting intentions estimate that is based upon farmer surveys taken earlier this month.

The USDA Economic Outlook Forum was held in February and turned-out estimates of 91 million corn acres and 87.5 million soybean acres. These estimates are based on budgetary derived numbers, not actual farmer surveys. The market uses the data from the Outlook Forum and private estimates until the March 31st report but after that is released the market will adjust prices accordingly.

This week Farm Futures released their survey of 600 producers regarding their spring planting intentions. In earlier weeks we’ve heard estimates from several other private firms, results from Farm Futures surveys were considerably different than other private firms. Their latest farmer gathered data points to a 1.1% decrease in corn acres this season, bringing planted acres down to 87.7 million acres. A 2.5% increase in soybean acreage is projected, totaling 89.6 million acres. (Reuters)

Trade estimates for Friday’s Prospective Plantings are shown in the graph below alongside the February Ag Outlook and the 2022 Final acres. The second graph shows the Grain Stocks numbers. This graph includes the average trade guess and what the USDA number was in 2022 for comparison.

There are 15 USDA report days per year, so when it seems like there is always another report lurking around the corner, it is! Below is one analyst’s ranking of these reports in order of the impact it had historically made on the market.

#1. The End of June Stocks and Planted Acreage Report. This report gives the first real estimate of final planted acreage for the season. The last 2 years this report has sparked big price moves in both corn and soybeans’; the previous 8 years saw much smaller price adjustments. Following this report the trade will turn its focus back to Chinese exports for 1 to 2 months until U.S. weather takes over.

#2. The August WASDE report is the first report to come out following corn pollination which helps predict what the expected national yields and also provides an idea of what next year’s supplies may look like.

#3. The third most important report of the year (according to the analyst writing the article) is the January report. USDA gives many updates to yield outlooks during the year but this report computes the final national yield average.

#4. In fourth place is this week’s End of March Planting Intentions and Stocks report. The report estimates the remaining stocks located in commercial facilities and on the farm which indicates how tight (or not) supply is. The Planting Intentions portion while informational, the upcoming weather and significant price shifts have significant influence on the final outcome.

#5. May WASDE Report

#6. July WASDE Report

#7, #8, #9. WASDE Reports from September, October and November.

#10. April WASDE

#11. June WASDE Report

#12. September Stocks Report

#13, #14 and finally #15. Are the March, February, December WASDE Reports

Another sale of U.S. corn to China was just announced bringing the total over the last 2 weeks to +3 MMT. This along with increasing prices in crude oil and a weaker U.S. Dollar are providing price support this week. Argentina crop production problems have influenced prices for many weeks. Estimates have somewhat stabilized now regarding Argentine production around 35 MMT. This compares to the current USDA estimate of 40.0 MMT vs 49.5 MMT harvested in 2022 and 52.0 MMT harvested in 2021.

Soybean prices have recovered slightly this week, what some are calling a “dead-cat-bounce”. Brazil’s record soybean harvest is over 70% complete and their export prices are cheaper than ours. Argentina’s soybean crop has suffered immensely this season. Recently the Buenos Aires Grain Exchange rated the nation’s soybean crop and found that 73% is in poor condition. New production estimates from several sources now place the total harvest under 25 MMT. This compares to the current USDA estimate of 33 MMT vs 43.9 MMT in 2022 and 46.2 MMT in 2021.

U.S 2023 corn planting has begun. Crop Progress data shows Louisiana has nearly finished, Mississippi is 15% planted while planting in Arkansas and many parts of the Delta are slower than normal due to wet conditions. Most production regions in Ukraine have also begun spring planting with around 724,000 acres of various crops currently planted. With Russia’s occupation of a significant part of the nation, the agriculture ministry projects that total production is likely to decline in everything but oilseed output which they estimate could rise from 18.2 MMT up to 19.2 MMT. (Reuters)

Looking at the 7-day temperature outlook, well-below-normal temps are forecast to continue. Some areas will see temps 15 degrees below normal. Around three-fourths of the Dakota’s still have a 12+ inch snowpack and there is another chance of snow in parts of North and South Dakota, Minnesota and Wisconsin. So while temps are forecast to improve next week there are parts of the Dakota’s, thanks in part to the snowpack, that won’t see temperatures climb above freezing all week.

Friday a storm that is currently developing over the Rockies will enter the Midwest. This system will have all the ingredients necessary to turn it into a powerful system including gusty, warm SW winds of 25-30 mph. This change in wind direction will bring a big contrast in temps with temps in the south reaching the low 60’s and only the low 40’s further to the north.

Friday is the day to watch for what could be the first organized severe weather event of the season for the Upper Midwest. The Storm Prediction Center reports that, “Potentially intense and widespread severe thunderstorms are expected Friday afternoon into the overnight hours across portions of the Middle Mississippi Valley and Mid-South vicinity, eastward to the Lower Ohio and Tennessee Valleys. Damaging gusts and tornadoes will be the main hazards with this activity.”

Depending on where the warm front sets up will determine where there will be shear for strong updrafts. The region where this occurs will have the highest odds for the development of tornadoes. The worst-case scenario for Friday would be the development of supercells containing hail, wind and tornadoes. Another possible scenario would have storms that move faster and turn linear which could lead to more of a high damaging wind and hail event. If the system were to arrive hours earlier than currently expected then the targeted area would slide further to the east. Tomorrow forecasts will be much more accurate regarding the exact timing, location, and severity than they are today.

The following 4 maps show what the GFS and EURO weather models are forecasting for rain (first 2 maps) and snow (last 2 maps) through Saturday.

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