Cash Strategist 4/5/2023
The main focus of the market is spring planting in the United States, which brings more interest in two main topics: weather and acreage.
This is also when we start to see the addition of risk premium into the market. The trade expects to see more risk premium than usual this year, especially in the soy complex, given the ongoing tight U.S. domestic stocks-to-use ratio.
More interest is falling on U.S. planting season weather outlooks. While seeding is happening at a rapid pace in southern states, progress is forecast to slow once it reaches the Corn Belt.
Heavy snow cover that is now melting has caused elevated soil moisture levels and, in some cases, flooding. Current weather models indicate these regions will remain wet and cool for the next several weeks.
The trade is expecting a large increase in corn acres this year, but wet soil conditions may start to change those opinions. If spring weather is as wet as some forecasts indicate, corn acres will decrease, and soybeans will increase.
Additional soybean acres would actually be welcomed by the soy complex. Ending stocks for the 2022-23 marketing year are currently projected at 210 million bushels,...
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