Soybeans were the worst performer last night as the USDA planting intentions report showed the US is expected to put plenty in and why not, there’s no money in anything else for the US farmer.
This year the US is expected to sow 89.5 million acres of beans, that’s a year on year increase of 7%. The news also weighed on canola futures at the ICE which slipped C$2.80 / tonne and Paris rapeseed which slipped €2.25 / tonne nearby. The IGC monthly report also suggested an increase in EU rapeseed production for 2017, this was against most trade expectations of lower production on less planted acres leading into winter. We may continues to see nearby canola futures fall quickly and outer months struggle as larger world production and US soybean supply increases. There is also expectations that the Canadian farmer will sow much more canola this year as they turn away from durum wheat.
This brings us to wheat, one of the few winners in last night’s report. US area is expected to be back 8% on last year at 46.1 million acres. To put this into perspective it is the lowest sown area since 1919, when record keeping began. US winter wheat area is down 9% year on year while spring wheat is expected to be back only 3% year on year. The most noticeable reduction when looking at the spring wheat planting intentions is the 17% expected decline in durum area, back to only 2 million acres. Let’s hope the Canadians follow their lead of the US and we see big durum reductions there too.