We are now at a point where planting delays and adverse weather will play a more important role in crop production. The main factor being considered is acreage, as we are at the stage where prevent-plant insurance may be used in much of the Corn Belt.

This insurance allows farmers to collect payments without seeding their crops. Given high input costs and historically low commodity values, this may entice more producers than normal to opt for the insurance payments.

The question is when any shifting of acres will show up in USDA reports. Historically these are known by the end of June, when the revised planting intentions report is released. Given the historic late planting it is questionable as to whether acres will be known in time for the data to be used in this report.

This means we may not have a realistic idea of planted acres until we get closer to harvest. It is also possible we could see those figures debated well past that.

When it comes to planting, the immediate thought is if corn plantings are delayed, those acres will shift to soybeans. While possible, this is not a given. This year that is especially the case, as we could see acres abandoned altogether. Insurance payments are a large reason for this, but also for the poor return potential on soybeans if our stocks grow even larger.

One big unknown in acreage and what crop to plant is if government payments will be made due to ongoing tariffs. Details in the new subsidy package claim payments will not be made if a crop is not planted – this could force a farmer to plant a crop regardless of soil conditions, returns, or yield potential.

We are already starting to see a division in the Corn Belt between the east and west when it comes to grain marketing. Planting has been more advanced in the west, and farmers have been more willing to market their remaining old-crop bushels.

Planting has been more delayed in the east and, as a result, farmers are holding old-crop bushels off the market. As a result, basis has a much softer feel in the Western Belt than in the east.

The United States is still facing trade issues, although there has been some improvement in these in recent weeks. The U.S., Canada, and Mexico have worked out their differences in trade, which has benefited several products, including commodities.

Issues remain between the U.S. and China, though, and this is where the U.S. is losing most of its export business. The main loss is in soybeans and how China has been booking nearly all needs from Brazil. It is now believed that China has most of its soybean needs covered through the start of harvest.

This is concerning for U.S. exporters, as it will hinder the start of the U.S. shipping season. This is also a concern for our soybean reserves, as it appears unlikely that stocks will decline from current projections, especially if we see additional plantings this year.

The U.S. is also seeing elevated competition from Brazilian corn exports. Farmers in Brazil are selling large volumes of corn, as they are seeing record yields along with elevated values. The Brazilian real (currency) has slipped lower while corn has rallied, which is favorable for producers in Brazil.

Farmers in the country have sold twice as much corn in May as in April, and are expected to keep selling into June. In turn we are seeing higher exports out of Brazil, as well.

African swine fever remains a market topic as the disease continues to spread through the Asian countries. Hopes were that this would bring buyers to the U.S. for needs, mainly China; this has not been the case, and we have seen little increase in pork demand. Many of the buyers the U.S. had been hoping to get have instead gone to the European Union for needs.

The buyer the U.S. had been counting the most on picking up was China. Instead, we have seen our share of the Chinese market shrink. In the first three months of this calendar year, U.S. pork sales to China were down 20 percent from the same period a year ago.

At the same time, the EU share of China’s pork trade increased 26 percent. This is a direct result of the trade tensions between the U.S. and China.

More analysts are starting to take notice of the world corn balance sheets. Over the past two years the world corn supply has shrunk by 44 million metric tons. While still ample, the tightening of stocks has generated some risk premium in the market.

A portion of this worry has been negated by the large corn crop produced in Brazil this year. Given near-perfect growing conditions and expanded plantings, Brazil has nearly 1.5 billion bushels more corn on hand this year than last year.

Livestock producers are starting to show concern in long-range market possibilities. One of the main points of interest is the cost of corn, which has risen considerably in recent weeks.

Another is the number of cattle that are expected to hit the cash market this fall. We have seen heavy placements and high on-feed numbers this spring, which will lead to elevated beef supplies this fall.

(Note: This column was submitted before the announcement late last week of potential 5 percent tariffs on Mexican imports. –Ed.)

Karl Setzer is Commodity Market Analyst for AgriVisor. His market commentary can be found on Twitter via @ksetzergrains

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources are believed to be accurate.