CME: Soybean Crop Virtually All Planted

US - Time for our daily mia culpa — The number two state in terms of swine breeding herd decline is not Minnesota at 30,000, it is Texas at 40,000. Almost all of that number is due to the closure of the Smithfield’s (formerly Premiums Standard Farms’) units near Dalhart, write Steve Meyer and Len Steiner.
calendar icon 29 June 2010
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While the US swine breeding herd is far more important in terms of total numbers, changes in Canada’s herd have been very important for the total North American market picture over the past 5 years. Canada’s next Hog Statistics report will estimate Canadian hog numbers as of 1 July and will be released in mid-August. It appears that Canada’s herd is indeed still shrinking but one of our friends in Canada reminds us that the impact of last year’s “Transition“ program (a government-sponsored herd buyout) are just now being felt in terms of market hogs. The first sows of that final buyout were culled in late October but producers have most of a year to empty their barns. Our contact expects market hog numbers in Ontario to drop from about 100k/week at present to 85k/wk. in a few months. The final impact of the last transition buyout will not be felt until next spring. Bottom line: Hog numbers are still falling in Canada, government buyout or not.

While the basic price versus cost economics are better, the strong Canadian dollar sharply diminishes the improvement seen by US producers. If Canada’s 1 July breeding herd is down as much in percentage terms from 2009 as it was in April, the August report will show 1.294 million breeding animals. Our long-ago thought that Canada’s herd could shrink to 1.2 million looks, unfortunately, more and more prescient.

Today’s Crop Progress report from USDA indicates that the soybean crop is virtually all planted as of Saturday while the condition of both the soybean and corn crop continues do deteriorate — but not to the point of any real alarm yet.

97 per cent of planned soybean planting is now complete, up from 93 per cent last week. Only 2006 saw this high a percentage of acres planted by the last weekend in June. In addition, 93 per cent of soybeans have emerged. That compares with 87 per cent last year but is equal to the 5-year average.

The trade’s attention will now turn almost completely to the growing process. USDA made its first estimates of corn silking and soybean blooming this week but both numbers are quite small and dominated by the early-planted southern states.

Of more concern is the continued decline in overall crop ratings. While this week’s combined percentages of good and excellent ratings are not at all bad, they are again lower with corn and soybean acres in those two categories falling to 73 per cent and 67 per cent, respectively. Those numbers are both 2 per cent lower than last week. Corn’s 73 per cent is just 1 per cent higher than one year ago while soybeans’ 67 per cent is actually 1 per cent lower than last year.

Both ratings remain above the 10-year average but continued wet conditions are taking their toll. Our travels through North Central and Northeast Iowa this week revealed a LOT of very good corn and soybeans but a good number of acres of standing water and very yellow plants. It has always been an axiom that you don’t raise a good crop unless you drown out the low spots but these crops are in need of some sun and heat units at this point.

Wednesday’s USDA Acreage and Grain Stocks reports will be quite important for market direction. The average of trade estimates for corn acres is 89.302 mil. (USDA's 31 March number was 88.798 mil.) while the average for soybeans is 78.292 mil. (vs. USDA’s 3/31 estimate of 78.098 mil.).

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