By John DePutter & Dave Milne – March 12, 2019
“It hasn’t taken notice yet, but the futures market could soon be awakening to the potential for significant planting delays this spring, according to a US analyst.”
– Syngenta website story, Mar. 11, 2019.
What it means:
The potential for higher futures prices.
It might seem like bad karma to acknowledge it, but oftentimes farmers need a weather problem somewhere other than their own farm in order to maximize the return from that year’s growing season.
This is most definitely one of those years. None of corn, wheat or soybeans are offering a particularly strong business case, and expected returns from most smaller crops appear underwhelming as well. In an environment like this, it sometimes takes a weather problem – such as planting delays – to get markets moving higher again.
Of course, the rub is that farmers don’t want to be caught up in the weather problem themselves. In order to really take advantage of it, they need to get their crops in the ground in short order and have them thrive while other fields struggle with delayed planting and emergence.
US Midwest sets the tone
For producers in Canada – who are price takers rather than price makers – that is the reality. It is the massive US Midwest production region that sets the tone for North American markets as a whole, so the weather there always has the definitive say over what the markets do during the hyper-sensitive spring planting, summer growing and fall harvest seasons.
On this side of the border, we just go along for the ride.
In the case of this year, a still-heavy snow pack in parts of the American Midwest and northern Plains is setting up the possibility that corn and spring wheat crops may be late getting seeded, something that will no doubt get the market’s attention, if in fact any delays end up being serious.
The question is, can Canadian farmers cash in?
The dry weather problems in large portions of Western Canada are already well documented, so it’s entirely possible any boost in feedgrain prices that comes from stronger corn values may be muted by drought-reduced Prairie crops. And as can be seen on the map below, parts of Ontario, particularly the east, have received above normal precipitation through the winter as well, meaning producers in the province may struggle just as much as their American counterparts in getting their spring planting done.
Weather markets can come and go quickly. Need help maximizing opportunities or trying to navigate those years when your own crops don’t quite measure up? Try our daily Ag-Alert service
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