Warmer weather, improved planting progress
5/20/14 — Weather has turned warmer and drier for much of the Corn Belt the coming week, with temps above normal for the first time this spring (and since December) so this could suggest a pattern change. Precip will be below normal the next week except for HRW wheat country, which is supposed to get the first decent rain in western HRW wheat country that should improve the crop. However, the past week showed another decline in winter wheat yield potential to 45.6 bu/acre, down another 0.10 bu/acre from last week on another 1% decline in G/E conditions to 29% G/E. This crop has gone backwards fast the last few weeks, dropping over 1 bu/acre since early April on an already below average crop (47.7 is trend yields). Overall, we have a poor winter wheat crop about to start harvest, and it shows up especially in western HRW wheat country.
Planting progress showed corn at 73% planted vs. 76% normally, with IA (-4% from normal), MI (-46%), MN (-28%), ND (-37%), OH (-10%), PA (-9%), and WI (-25%) all behind their normal planting progress. The states of ND, MN, MI, and WI are the ones where Prevent planting is a real risk to corn acreage, as these states are critically far behind normal and they just received .5-1” rainfall over 95% of these states. That will keep planters at bay for at least a few days, and that is too much for now. Some of the prevent planted acreage is likely to end up planted to soybeans or another late season crop, but significant acreage in ND is likely to remain unplanted.
Soybean planting is 33% vs. 38% normal, not critically far behind but behind nonetheless. It’s expected, however, for this week to allow another window of planting opportunity for all but ND, MN, WI, and MI. That will allow a good share of remaining soybeans to be planted this coming week. Cotton planting is 46% vs. 48% normally, sorghum at 39% planted (equal to average), peanuts 43% planted (vs. 49% normal), sugarbeets 52% planted vs. 84% normally, and sunflowers 1% planted vs. 6% normally. Rice is 87% planted, 5$ ahead of normal, and oats are 78% planted (vs. 88% normally). HRS wheat is only 49% planted vs. 68% normally, with barley at 68% planted vs. 69% normally. Overall, we remain slightly behind normal in planting, but the warm and relatively dry weather this coming week should allow planters to catch up to normal in all but HRS wheat planting (which is still well behind normal due to ND/MN).
The extended 8-14 day forecast looks warm and wet for most of the Corn Belt, which might be a good growing season forecast once the crop is planted. That should allow rapid germination and relatively good conditions for most of the Corn Belt. Again, the northern tier states (ND, MN, WI, MI) will continue to struggle in their planting progress, but the warm weather should at least allow soils to dry out some during the extended period. For ND producers, it might be too late to help the corn crop get planted, but it could salvage a lot of acreage for soybeans (instead of corn).
The grain trends have turned lower. Pro Ag projects corn to drop $1 or more, and soybeans to drop $2 or more by harvest. That’s why we are 100% priced in 2014 and 2013 corn/soybeans. If you are not, we would advise catch up sales immediately. Wheat is more of a quandary, as slow planting progress in HRS wheat and declining winter wheat yield potential finally are propelling it higher overnight. It doesn’t look like we’ll get our $7.50 target, and will have to settle for selling the next bounce to $7.15 July Chicago wheat, which is still a long ways off after the recent break.