Commodities, Sports, and Prognostication

Commodities and sports typically don’t go together most years. However, this fall, the two topics have come together in an interesting way.

Being a long-time sports broadcaster, I’ve noticed that when the major sports seasons wrap up, certain sports media love to immediately do what they call a “way-too-early” look to the next season. Evidently, it’s not just a sports thing.

I know harvest is just ramping up in many areas as I write this, but Farm Futures took what some might think is a “way-too-early” survey of planting intentions for 2023, and I couldn’t pass it up. It looks like corn will be king once again next spring among all commodities.

Commodities
Corn looks to be king when it comes to 2023 spring planting (photo from agriculture.com)

Jacqueline Holland is the grain market analyst for Farm Futures, and she wrote an article about the survey. She says the way-too-soon survey results are favoring corn for spring planting despite some challenges that come with the commodity.

“Even with higher fertilizer prices, farmers are still prepared to go all-in on corn,” she said. “Our survey found that farmers expect to plant 94.3 million acres of corn, a five percent increase from USDA’s current acreage estimates.”

If that prediction is realized, it would be the most corn planted in the U.S. since 95.4 million acres went into the ground in 2013. While soybean acres will be behind corn next year, U.S. growers are still sowing a lot of beans during spring planting in 2023.

“We expect farmers to plant 87.3 million acres of beans,” Holland said. “That’s almost a one percent decrease from this year’s acreage.” Cotton is one of the reasons that soybean acreage is going to drop a little. In the Mississippi Delta, a lot of acres in that region are going to provide “stiff competition” for soybeans during spring planting.

They also expect wheat acres to rise in 2023 thanks to more winter wheat acres in the Eastern Corn Belt. Farm Futures expects growers to plant 36.6 million acres of winter wheat. With more winter wheat acres going in the ground, spring wheat acres will back up from this year, with the 2023 estimate at 12.3 million acres.

“That means a grand total of 48.9 million acres of wheat will be planted in 2023,” she said.

Holland admits she was a little surprised at the survey results. She says there was a lot of price responsiveness to the rapidly-rising fertilizer prices heading into spring planting this year.

“When farmers were making their planting decisions in December last year, soybean prices were rallying strongly,” Holland recalled. “But with all of the issues we’ve seen with the flow of corn in the Black Sea this year, as well as the U.S. corn crop struggling with drought, corn has some bullish prospects for next year.”

She says if we do see a larger corn acreage next year, that might lead to some expansion back in the cattle market. In turn, that would likely revive some corn acreage in the Plains. Remember, about three million acres of corn went into prevent plant in the spring of this year.

Commodities
A Farm Futures Survey shows we might be harvesting a lot of corn again come fall of 2023. (Photo from kansasfarmfoodconnection)

“A lot of those acres were in the Dakotas and Minnesota,” she said. “Barring another bad weather event next year, I expect those acres to go back into corn in 2023.”

Farm Futures also has other questions in their survey beyond commodities and planting intentions. Those questions include where farmers are headed with input costs next year. Based on the survey responses, Holland says profit margins are going to shrink next year. The question is, how much?

“As of right now, it doesn’t look like growers are going to skimp on any fertilizer applications,” Holland said. “Most responses show farmers are ready to lock in their fertilizers at the lowest prices they can get. That will hopefully keep at least some liquidity in these crop budgets.

“We’ll see how these things ultimately shake out for planting and commodities,” she added. “There’s a long time between now and next spring.”

Dry Weather in Time for 2021 Harvest

Dry weather is a never-ending talker at the local coffee shops during the growing season, but even more during harvest. Farmers can get a lot of work done in a short time if the weather stays dry. John Baranick (rhymes with ”mechanic”) is a meteorologist with DTN, who says things might be a little drier as harvest continues to speed up across most of farm country.

Drying Off for Harvest

“A high-pressure ridge will continue to move into the Pacific Northwest and will block a lot of moisture from reaching the Upper Midwest for several days,” Baranick says. “Now through the last week of September should be pretty good for getting out there and harvesting the crops.”

The 2021 drought dried out a big chunk of rural America this year, but over the last several weeks, much of the American farm country saw consistent rainfall. Baranick, an Iowa State University graduate with degrees in meteorology and agronomy, says the consistent rain has recharged at least some of the deficit in soil moisture.

“It has,” he said. “We’ve seen some good rainfall in Minnesota, Iowa, the eastern Dakotas, Wisconsin, and Eastern Nebraska over the past several weeks. The level of drought keeps getting reduced in many of those areas. Some areas in the category of D3 drought were eliminated in northeastern South Dakota and northwest Iowa.

“Unfortunately, most of these areas have been so far behind on rainfall that getting almost a summer’s worth of rainfall in a month wasn’t enough to eliminate the drought,” Baranick added.

He estimates that dry weather has put most areas around 6 to 8 inches behind on their average rainfall totals. It’s even worse in western South Dakota. “I was talking to someone that farms out there, and he’s 10 inches behind on their average rainfall total,” he added. “We’re way behind, and it’s going to take a lot of rain to reverse that trend.”

Dry weather
Iowa State University graduate John Baranick is a meteorologist with DTN/The Progressive Farmer. (photo from dtnpf.com)

Baranick, a meteorologist with DTN since 2011, says the fall season will have a lot of variability in the systems moving through rural America. Early September featured some good rainfall, but for the rest of September into October and November, he says they don’t see a strong signal either way of above-normal precipitation that will eat into some of that dryness.

“Some areas may improve a bit while others could degrade,” he said. “I don’t think there’s going to be a lot of movement either way through the fall season. We also don’t see a lot of moisture recharge during the winter season either,” Baranick said.

“Even with good precipitation over the winter, an extra inch or two isn’t going to bite into the five, six, or even eight inches of rainfall deficit we’re looking at,” he said. “We’re going to be dependent here in all these drier areas across the Western Corn Belt, especially the Northwest Corn Belt, for recharging our soil moisture and getting next season’s crop off to a good start.”

Plains Staying Dry Too

Dry weather is affecting he Great Plains from southern Nebraska down through Texas, which makes up the country’s largest winter wheat-producing area. A recent look at the Drought Monitor showed drier areas spreading out quite a bit across even more of Texas, Oklahoma, and southern Kansas.

“We’re looking for some rainfall in many of these areas because it’s also been hot,” Baranick said. “The temps have been above 90 and approaching 100 degrees on many days. The temps have been way above normal, and it’s sucking the moisture right out of the soil. Unfortunately, any systems potentially coming through this week don’t look like they have a lot of moisture.”

The Plains State have been and still are quite dry in 2021. (Photo from bismarktribune.com)

He says that high pressure setting up in the western U.S. will help keep systems at bay in much of the Plains as well. Unfortunately, the above-normal temps and dry weather in the forecast will continue to sap the remaining soil moisture.

Looking ahead to the fall and winter seasons in the south, we’re heading into a La Niña weather pattern, which typically means warm and dry weather in southern states. These areas seeing their soil moisture drying away don’t have a lot of immediate hope for building that back into the soil.

“For wheat production in the Plains, we’re going to be dependent on moisture coming into the region,” he said. “Hopefully, fall rains will be timely enough to get some good root development in wheat through the fall before they go dormant in the winter.

“We’re hoping that the rains turn on right away when we get out of the La Niña in the spring,” Baranick added. “If we don’t, the winter wheat crop in the Plains is going to be hurting.”

South Finally Drying Up After Storms

Hurricane Ida and Tropical Storm Nicholas brought a lot of extra water to the Southern States and the Delta Region. Moisture coming into the region off the Gulf of Mexico was difficult to turn off.

Hurricane Ida, followed by Tropical Storm Nicholas, brought far too much moisture and damage in the south. Drier weather is on the way, so hopefully cotton and soybeans can dry out in time for harvest. (Photo from wkrg.com)

“We will see some dry weather conditions finally get into the South,” he said. “That’s good because it’s going to take a bit for soybeans and cotton to dry off.”