The Good: As ugly as the markets were yesterday, there was nothing but good news from the ag commodity space today. The USDA report was bullish for both corn and soybeans, with the combined acreage of both crops reaching only 178.7 million acres versus trade expectations of 183.2 million acres. Although soybean area came in 4.52 million acres above last year, the 87.6 million acres was well below the 90 million acres expected by the trade. This pushed soybean futures up the 70 cent limit today and canola futures followed suit. This pushed the canola contract up C$30 per tonne to close at C$717.70 per tonne. Any concerns about the technical breakdown of the July contract have been overwhelmed by the fundamentals for the oilseed market.
The Good: The corn market also closed up the 25 cent limit today, which allowed the July contract to close at US$5.47 per bushel. This is still at the upper trading range of the recent market movement and will have to move higher in the coming trading sessions. The job of the market is to push more farmers to plant corn this spring and time is running out. This means that the July contract is headed for the US$6.00 per bushel levels in the coming days. This should also support other markets, especially the spring wheat market. North and South Dakota are in the cross hairs for the corn and soybean markets as these states have some spring wheat area that is prime for poaching!
The Good: The USDA report was bearish for wheat as winter wheat area was increased by 1.1 million acres and spring wheat plantings were only down by 500,000 acres from last year. The plantings were not evenly distributed as soft white spring wheat plantings in the PNW increased by 60,000 acres, while the Northern Plains saw a decrease of 570,000 acres. The move in the corn market pushed spring wheat futures up nine cents per bushel in today’s trading session, but the increase was not enough to move out of the downward trend line. The market seems to be expecting that wheat area will remain unchanged in the face of stronger corn and soybean markets in the next month. Expect spring wheat area to decline in the June report as both corn and soybean area increases in the Northern Plains.