Grains started the month of April with a little bit of follow-through fanfare from the U.S.D.A.’s stocks and acreage report on March 31st and some speculation over the start of the North American planting season and end of the first South American harvest. Rains last weekend and some forecasted this weekend in Argentina is likely to keep stalling harvest progress there in both bean and corn fields but it’s hard to expect prices to see the rally they did this time a year ago through mid-June as there’s plenty of supplies in the global pipeline still. Further, key growing regions are likely to miss where the rain is heaviest and warmer/drier weather is expected to open the fields up for combines again next week. Back here in Canada, the Commodity Weather Group is expecting the last 2 weeks of April to be wetter-than-normal in the Prairies, creating some tough conditions to get field work in before the rush to roll drills starts. This is obviously compounded by the fact that there’s a lot of work that wasn’t done in the wet conditions of last fall, especially considering that there’s about 2.3 million acres of uncombined fields still sitting out between Alberta & Saskatchewan alone.

Of the acres that are likely to go in, the U.S.D.A. is forecasting 89.5 million of soybeans getting planted in America this year, 1.3 million higher than what the average pre-report guesstimate was and a whopping 6.1 million acres bigger than last year (or a 7.3% jump year-over-year). We started getting bearish on the oilseeds markets all the way back in January in our grain markets outlook, cognizant that there could be some good pops to take advantage of, but knowing in the long-term things were poised to head lower because of large expected oilseed acreage in both America and in Canada (somewhere between 21-22 million acres of canola? Yes). This has only been compounded by the fact that the Brazilian soybean harvest has been coming in bigger than expected and crop development in Argentina has started to improve (albeit we are aware of the rain, as previously mentioned).

In terms of remaining inventories, there’s still 1.735 Billion bushels of soybeans still in the U.S., a 13.3% jump from March 1, 2016! This number came in a little bit above pre-market expectations but given the record U.S. crop that came off in 2016, and despite relative decent domestic and export disappearance, we already knew there was a lot of beans still available. For corn, the existing inventories are a bit more puzzling as with 8.616 Billion of still unused bushels in America, which is 10% higher than last March, but the pace of feed use, export volumes, and ethanol crush suggests this number should be in fact lower and we expect to be revised lower in the next few months. U.S. wheat stocks jumped 20% year-over-year to 1.655 Billion bushels, thanks to a massive winter wheat crop, and because of the corresponding drop in wheat prices over the past year are down about 20% (crop type dependent), acres are down significantly as well.

More specifically, U.S. winter wheat acres are forecasted to drop 3.5 million or nearly 10% to 32.7 million while spring wheat acres is expected to fall 5% or 600,000 to 11.3 million for Plant 2017. The biggest impact though on wheat was seen in the durum side of things as acreage is forecasted by the U.S.D.A. to decline 17% from last year to an even 2 million acres. Combine this with Canadian durum acreage likely coming in closer to 5 million acres this spring versus the 6.2 million last year, we could start to see prices stabilize, albeit the European crop is looking pretty good right now. For corn, 2017 U.S. acreage came in a little bit below pre-report guesstimates at 90 million acres, which is a 4 million or a 4.3% drop from 2016. As both stocks and acreage numbers for corn are looking bullish, futures and cash values have been holding their own. Overall, with the difference between November soybeans and December corn futures now below 2.5, is it possible that we see a slight bump in corn acreage when all is said & done? Yes, but there’s still going to be a lot of oilseeds planted (and available) in 2017/18 and so I leave you with the question of what’s your marketing plan If there’s no Plant 2017 rally? (remember that if there’s any rally, the highs are usually found somewhere between mid June and early July). Before the drills roll, it’s worth giving another monthly dose of consideration to your grain marketing plan.

To growth,