Bearish factors presently prevail

Farm Forum

05/12/15 — Crop progress reports yesterday afternoon, 5/11 continue to suggest rapid planting progress in corn, soybeans, and HRS wheat. The early planting followed by wet conditions forecast over the next week will be perfect growing season forecasts, and are a good start towards getting another record large crop in 2015. That is what is continuing to pressure grains to new lows, along with an improving winter wheat crop yield potential.

Specifically, corn planting moved to 75 percent complete vs. 57 percent average, with 20 percent of the crop planted last week – mostly in the eastern Corn Belt where an open window of planting emerged last week. States such as Indiana planted 31 percent of their corn crop (now 52 percent planted vs. 52 percent average), Kentucky planted 39 percent (now 64 percent planted vs. 62 percent normal), Ohio planted 40 percent of the crop last week, (now 55 percent planted vs. 47 percent normally), and Pennsylvania planted 37 percent of the crop (now 44 percent planted vs. 37 percent normally). The western Corn Belt states are pretty advanced in their planting progress based on an open week the prior week, and the rain last week will recharge topsoil moisture and help germinate recently planted crops. Overall, this is a very good start to corn production in 2015 – early planting followed by ideal moisture conditions. Corn emergence is at 29 percent, well ahead of normal 24 percent. Soybean planting is at 31 percent planted vs. 20 percent normally, with many states like Minnesota well advanced (70 percent planted vs. 17 percent normally). With rain forecast the next week across much of the Midwest, planting might slow this week but the moisture is especially needed in the western Corn Belt and HRS wheat country, where it has been dry recently. Overall, early planting and high soil moisture levels are conducive to another record large crop in 2015.

HRS wheat planting progress is 87 percent complete vs. 51 percent normally, and 54 percent emerged vs. 25 percent normally. Barley planting is 88 percent complete vs. 58 percent normally, with 59 percent emerged vs. 28 percent normally. Oat planting is 93 percent complete vs. 76 percent normally, with 72 percent emerged vs. 59 percent normally. Oat ratings are 73 percent rated G/E.

About the only planting progress even remotely behind normal is sorghum planting at 32 percent planted vs. 33 percent normally, with peanuts 26 percent planted vs. 27 percent normally, and cotton 26 percent planted vs. 32 percent normally at this time. The southeast is behind normal still, but conditions are improving for planting as it has been dry there the past week to 10 days.

Winter wheat crops are now 56 percent headed vs. 45 percent normally, with crop conditions improving another 1 percent to 44 percent rated G/E, now well ahead of last year’s 30 percent rating. The Pro Ag winter wheat yield model continues to rise, up .18 bu/acre this week to 48.06 bu/acre, now well above ‘trend’ at 47.26 bu/acre. With continued improvements in yield potential heading into harvest, it’s likely USDA will need to continue to revise upward their yield forecast for winter wheat (likely to begin in this morning’s 11 a.m. report).

Weather forecasts continue to suggest relatively wet weather for the next 2 weeks across most of the Corn Belt, and temps should warm seasonably across the Midwest over the next 2 weeks.

Overall, there is little bullish news right now to trigger a rally, so prices are likely to slip lower as the crop is getting planted timely, and there is improving moisture conditions that are likely to lead to an above average crop in 2015.