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Market Watch – All Eyes Are On Planting And Demand

Corn ear closeup

Those watching the markets seem to be focused on two primary things right now – the progress of corn planting and beef demand. First off, I really question the whole planting progress paradigm. It used to be so relevant not that long ago, but with today’s new equipment and new varieties, its importance is diminishing. Besides, planting delays usually are associated with moisture, and that’s rarely a negative thing when talking about yields.

The boom in corn prices has enabled most producers to upgrade their equipment, and a lot of planting can be done today very quickly. For instance, it was estimated that 6.6 million acres of corn were planted in Iowa last week. It certainly doesn’t take long to get a crop in the ground these days.

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I’ve wondered if planting progress wasn’t really a way to create pricing opportunities rather than a true measure of the ultimate crop. Whether it really worthy of as much attention as it gets, planting progress is nonetheless a stat that is ingrained in market analysts’ thinking, just as weaning weights are to cow-calf producers.

Where weaning weights are concerned, the data shows there are highly profitable, as well as unprofitable, operations at every weaning weight level. However, we will still talk about it. I suspect we’ll still be talking about planting progress 10 years from now, despite the data that shows its effect on yields isn’t what it once was.

The second factor is beef demand. Packers cut their kills this week in an attempt to push beef prices higher as margins remain in the black. Meanwhile, cattle feeders are enjoying margins of $200/head and more. Grilling season has supposedly started and a couple of big beef holidays are just around the corner. Everyone is looking to see if beef demand will show some seasonal strength.

Perhaps the winter storm that left a foot of snow in Colorado this week is this winter’s final hurrah, and spring and summer can now finally assert themselves. No doubt about it, numbers are tight – that is a given, and beef demand and input prices will determine prices and margins in the weeks and months ahead. 

Troy Marshall’s opinions are not necessarily those of or the Penton Farm Progress Group.  


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