Some thing that I don't know
This coming week, planting progress should be huge
I would expect price to go down
But: Are we producing for our domestic market??
If so then planting progress would encourage lower prices as planting will be timely in most places
If the world is short of food supplies will the world come to us and buy needed food and grain, thus higher prices as the world competes for limited supplies
We know the USA is in a huge drought, thus some food supplies will be limited until weather or rain arrives. Some want less rain so not every place is ideal, but the majority should be okay, next week, for planting progress. Thus we will have a good start for most grain supplies
Or is the price of grain so high, that the world can't afford our export price, thus sales are limited and lower prices must happen for exports to happen
This might belong in trading, IDK
One thing past prices have shown me
No matter what looks like a good price in Dec to planting time, the delivery prices the following yr is always higher, this past couple yrs/ I just assume this is a result of inflation but I can't believe price goes up for how long ???
But how long will we have inflation??
That seems to be the question
I moved this wonderful topic to the trading section for you. This is a huge deal.
And we'll all be rewarded with the profound discussion that follows!
I think it all boils down to the weather the next 3 months. We have elevated odds, with the long lived cold water in the Tropical Pacific(La Nina) of a hot/dry Summer and the drought expanding into the Cornbelt.
The shocker the last month, when the La Nina was expected to weaken, according to most models and peter out the next several months to near neutral by the end of the Summer is that it STRENTHENED.
It's virtually impossible now for us to not have La Nina for the entire upcoming growing season.
This is the latest update from last week:
ENSO: Recent Evolution,
Current Status and Predictions
You can dial that into the already bullish growing season weather implication assessment from the previous week in my outlook, which I'll try to keep updated.........this is HUGE and will mean everything, more than any other growing season that I can remember:
NEW: La Nina/-PDO with latest Summer Forecast 4-26-22
25 responses |
Started by metmike - April 26, 2022, 6:59 p.m.
On the latest weather, it's going to turn very warm/dry and the planting is going to catch up in a big hurry.
In every season, there's a point in time where very warm/dry goes from bearish for planting to bullish for growing.
The more behind that planting is.........the later in the season that flip from bearish to bullish becomes.
In the drought year of 2012, for instance very warm and dry was already bullish in April because planting was way ahead and the market was, rightly so worried about the very warm/dry on the crop in the ground already.
Actually let's go back to January 2000 to really sharpen your minds being able to tune into this mindset, with a unique example.
I lost 200 K in January 2000 in just a few days, being short 200 contracts of March beans ahead of a huge rain in Brazil, thinking that the market would for sure sell off because of the benefits to the actual growing crop down there.
I nailed the weather in Brazil and the market SHOULD HAVE rewarded me for being right instead of kicking my arse because I missed what the market really cared about.....at least all the big fund speculators that were trading US weather at the time.
Hugh, in January? That sounds crazy! Let me show you why on the next page.
We'd had a major La Nina that kicked in strong in the 2nd half of 1998, that turned the late Summer hot/dry and hurt, mainly bean yields in 1998 but the weather was great before then with enough soil moisture to last thru the 1998 season.
Then in 1999, there was some great weather and timely rains, before it turned hot/dry again in the 2nd half of the season. The early season good weather, again kept it from being a disaster but bean yields were hurt and it caused below trend yields but no disaster.
However, the drought worsened in late 1999 and over the Winter, heading into early 2000, the soils were very dry and the NWS started issuing alerts for the expectation of severe drought coming up for the 2000 growing season many months before the crop was even planted.
Here's the La Nina graph for that period below. Note the huge spikes down icicle, La Nina signature from late 1998 into early 2000.(you can also see the same signature ahead of the 2012 drought(which was in the S.Plains in 2010/11) and the same signature, with the spikes down at the end of the graph from the current, 2 year long La Nina.
So the soils continued to stay dry and even get drier over the Winter of 99/00 with the NWS and others putting out drought alerts many months before we even started planting the 2000 crop,
Brazil weather at the time was not followed as closely either by the market, so this enabled the market to focus on US weather in January 2000!
Seems crazy but this is why: NE/IA/IL/IN with moderate to severe drought and seasonal forecasts calling for the drought to WORSEN!
So above average temps and below average rain forecasts were BULLISH months before the crop was planted in 2000.
What about the drought of 2012?
We saw early planting but the drought was not as bad as 2000 and it was most severe in the S.Plains into the Spring of 2012, similar to the way it is now.
The market was not threatened by the drought of 2012, in the Spring. Not until May when we suddenly turned on blistering heat with almost no rain
2+ months later, look what that weather did to soil moisture!!
Widespread extreme and even exceptional drought here in S.Indiana, the worse drought category. This was just an expansion northeastward of the drought in the map above from the heat ridge that was generated because of the La Nina.
This is the latest Drought Monitor below.
We just had a massive rain event to erode the southeastern fringe of that severe drought(KS/OK), which will be incorporated into NEXT WEEKS drought monitor.
These maps sometimes take a day to catch up to incorporate the latest data(the bottom map is only updated once a week).
But temperatures have been extremely chilly..........too cold to plant in much of the Midwest, and too wet in the East and planting is a couple weeks behind, so what the crop needs most is maximum warmth and dry for the next couple of weeks:
U.S. farmers had planted just 14% of their #corn crop by May 1, the slowest for the date since 2013 and well behind the average of 33%. That is up from 7% in the prior week. Trade expected 16%.
What a difference a year makes. U.S. #corn planting was quick & efficient in 2021 but has been slow in 2022. On May 1 last year, progress in top states Iowa, Illinois & Minnesota had all reached or surpassed 50%. Single digits this year - Minnesota hasn't even started.
U.S. corn yield reached a record 177 bu/acre in 2021, largely because summer weather was favorable in most areas. I wouldn't say we can rule out a record yield yet in 2022. Summer weather is still key. But honestly record yields might not be my top scenario at the moment..
So now you have the complete backdrop/background to understand the weather situation here in 2022.
Here's the latest forecast:
7 Day Total precipitation below:
Highs for days 3-7:
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Here's all the weather:
If this were 2000 or 2012 or, in fact any year with planting AHEAD of schedule, I'd say that the forecast is bullish.
If 2022 was ahead on planting at this point, with the very bullish Summer outlook, I would say that the forecast was VERY bullish.
But we are a couple of weeks behind.
This very warm/dry weather was clearly very bearish for beans/corn last week to get the crop planted as it will HELP C and S
but BULLISH for Winter Wheat, especially HRW that's already in the ground that will be hurt by that weather.