April 25, 2006

 

US industry players show little concern over corn planting pace

 

 

Despite overnight rain in the western corn belt, and what has been generally been perceived as a slow start to the spring seeding season, grain market insiders are exhibiting little panic regarding prospects for planting of the 2006 US corn crop thus far.

 

The US Department of Agriculture says 9 percent of the US corn crop was in the ground as of Apr 16, one percent below the five-year average and a fair distance behind the pace of the previous two seasons.

 

"It may surprise some that, though this seems like a 'slow' figure, it is actually the third-fastest corn planting pace on record (behind only 2004 and 2005)," said Freese-Notis Weather/Weather Trades of Des Moines, Iowa.

 

Although rains dampened planting plans in much of the upper Midwest and central/eastern corn belt last week, crop-weather specialists point out conditions were actually very conducive to fieldwork in western and southern production areas last week, helping to keep corn planters nearly on schedule.

 

"Favourable weather this weekend and next week will allow growers to actively plant corn, with weekly progress expected to be 20 percent" as of Apr 23, said Country Hedging analyst Ami Heesch Friday (Apr 21).

 

The five-year average pace for US corn planting by that time frame "is about 22 percent, but a figure of 19 percent done by Apr 23 would still be the third-fastest ever," said Freese-Notis.

 

A broad swath of the Midwest--from southern Minnesota to northeast Iowa, northern Illinois, Indiana and southern Ohio--has received above-average rainfall since Apr 1. Rains in excess of 3.00 inches also fell in isolated areas of Kansas, Nebraska and Missouri during the past 24 hours, courtesy of a storm system which is expected to sweep through the entire corn belt by Wednesday.

 

"Minnesota, southern Indiana and Ohio are abnormally moist, with significant planting delays being encountered," said market consultant Rich Balvanz, with Ag Management Services of Marion, Iowa, although he noted, "the added moisture is generally beneficial for Illinois, which is still recovering from its 2005 drought."

 

Balvanz said a corn planting analysis provided by FCStone last week emphasises that nearly half of all US corn has been seeded by May 7--with two-thirds in the ground by May 14--in 11 of the last 16 years.

 

The study found that of those years, eight seasons ended up meeting or exceeding 100 percent of the trend-yield for corn, while the remaining three crops have reached at least 98 percent of expected trend-yield.

 

"Thus if the US crop is at least 47 percent planted as of May 7 and at least 67 percent planted by May 14, we would expect the odds to be about 73 percent for it to reach at least 100 percent of its trend-yield, or 151 bushels per acre," said Balvanz. "And it would be almost a lock to reach at least 98 percent of trend, or 148 bushels an acre."