Well, here we are. At times like this we don’t talk about it, but it has been a brutal 2019 spring for getting any crop. As we look into June, most of the Ontario corn crop isn’t even close to being planted and many of our plans have been compromised as we juggle management decisions with crop insurance deadlines in front of us.
There is not much good news in this other than the fact Ontario and Québec farmers are not alone. As of last Sunday’s 58% of US corn is planted which is the slowest progress since 1980. As of last Sunday 29% of the US soybean crop had been planted which is the slowest since 2009. In the United States farmers are filling up meeting halls to learn about prevent planted acres. This is on top of the $16 million, which they will receive in farm aid for trade injury from their government. Who knew 2019 Mother Nature would grow so angry?
We have known these times have been difficult for at least the three weeks, but the market has ignored everything until now. Mother’s Day was supposed to be the date for the markets to wake up to it, but that didn’t happen as it was understood the technology that we have today we can plant very quickly. So the market yawned. Then came along Memorial Day weekend, where the grain market didn’t get the hot dry forecast coming into Monday night. Planting would be further delayed. Grain futures prices exploded upward like we have not seen for quite some time.
The American cash corn index exploded up toward $4 dollars, the highest its been seen since 2015. July 2019 corn recently reached a high of $4.38, when all spring the dream of reaching $4.25 was a panacea. Soybeans prices have been reluctant followers, but even they got back up to $8.92 yesterday. It is almost like the script has been ripped up. For several years now we’ve become accustomed to big crops planted in the United States without any trouble. Ditto for Ontario and Québec. Now this.
Of course we are in the same place that we have always been the last few weeks. Nobody knows what is ahead of us, not only in the fields but also within the market. For instance, the soybean weekly chart shows major resistance for soybean prices between $9.25 and $9.50 area. Corn prices have shown the same type of resistance in the $4.39 per bushel area. If the rain continues, maybe those resistance levels will be like speed bumps for the old cartoon roadrunner. However, if hot and dry dominates over June 2019, maybe will look like good times gone by.
At the same time the world doesn’t end in Ontario and Québec or the Eastern corn belt in the United States. We still have all of the other issues, specifically a potential trade agreement with China and African Swine Fever. It was reported last week by the Chinese Ministry of agriculture and rural affairs African swine fever had been found in Bobai County in South China’s Guangxi province. To put it in perspective, quoting DTN’s Lin Tan, Bobai County is one of the largest hog-producing counties in China. The county typically has stocks of 500,000 sows and produces 6.2 million head of hogs annually. In the U.S., such production would rank Bobai County behind only Iowa, North Carolina and Minnesota for hog production. That’s a lot of hogs.
The Chinese sow herd may be 30% less than last year. Hog prices have not increased as high domestically as you might expect because companies and restaurants were stockpiling pork earlier this year. You would think that the pork would eventually hit the fan, so to speak, but everybody has their eyes open. Canada and the United States are doing is much as they can to keep African Swine Fever from arriving here. I think we can all see the incubation of some big agricultural price problems ahead.
Usually though, we have a crop to sell, but unfortunately, the real tangible reality of that isn’t true so far this spring. As the rain drops dance on my window, I can look back on 40 years of experience, which tells me we’ll get this crop planted. Who knew the target was on our back as we headed into spring. I said this to a Bryant Ohio farmer last week. He responded by saying the target was on our chest.
Let’s hope not. We’ve got June to go. The sun will shine. Let’s be optimistic. At Christmas we’ll surely look back and wonder what the fuss was all about.