Planting Season is Underway

Mar 28, 2019


As the latest planting season gets underway, end-users and investors will be looking for any issues that could potentially impact the supply/demand equation. Any significant deviations from recent USDA projections could have a major influence on prices and significant changes in weather could also affect total supplies as various harvest dates approach.

Midwest Floods

Recent flooding in the Midwest has sparked some corn and wheat planting concerns, especially in areas of the Corn Belt including Iowa and Nebraska. According to Agweb, early estimates for lost crops and livestock have already hit $1 billion in Nebraska alone. The potential for delayed planting fueled a spike in corn prices, which recently jumped to a 2.5-week high.

The flooding is set to worsen in the weeks ahead and could potentially ignite higher prices in the grain complex. A recent article from quoted Ed Clark, Director of NOOA’s National Water Center in Alabama, as stating “This is shaping up to be a potentially unprecedented flood season.” With or without additional rain, water flowing downstream could do significant damage and has the potential to keep some upside pressure on grain prices.

Although much of the recent focus has been on the flooding in the Midwest, the wheat crop is facing some potential planting challenges as well. According to, heavy snow and expected flooding in the U.S. Northern Plains has heightened the risk of planting delays. Seeding typically begins in April, but serious weather issues, especially in top-producer North Dakota, could have a significant impact on seeding timelines and total production.

Soybeans Could See Massive Production

Soybean farmers appear to be planting what could be the third-largest crop ever, despite ramifications from the ongoing U.S./China trade war. Many farmers are left with unsold inventories from the previous harvest, and there is no specific timeline on when the tariff war may end. The U.S. Government rolled out a $12 billion farm aid package to ease the effects of the trade war, and many farmers appear hopeful that China will return to the table or another rescue will be implemented.

According to the St. Louis Post-Dispatch, the USDA expects soybean prices to fall in 2019 due to tariffs and increasing supply. At the end of the day, however, many farmers are unable to rotate into other crops.

Soybean prices have followed other key grains such as corn and wheat slightly higher at times due to weather concerns, however, the bean market does not appear to be facing any significant weather issues at this time. Although weather can and does change, planting appears to be strong and the market may pay greater attention to other factors in the weeks and months ahead.

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