May 5, 2009

The wet, chilly spring weather has continued to take its toll on planting progress for both corn and spring wheat, as seedings for both crops are well behind the average pace, the government said Monday (May 4).

The US Department of Agriculture's crop progress report also showed that soybean planting is getting underway but remains slow, while the condition of the winter wheat crop improved slightly.

The USDA reported corn plantings at 33 percent for the week ended May 3, up from 22 percent last week and 24 percent last year. Progress was below the prior five-year average of 50 percent, however, and below trade expectations of 35 percent to 40 percent.

A CBOT floor trader said sentiment had shifted during trading Monday, with most expecting to see progress closer to 40 percent than 35 percent.

Although the northwest Corn Belt, including top corn-producer Iowa, remained ahead of the average pace, farmers were behind schedule almost everywhere else. The most striking delays are in the key states of Illinois and Indiana.

Illinois' crop was 5 percent planted as of Sunday, compared to an average of 66 percent and last year's total of 25 percent. Indiana, which ranks behind Illinois as the third-largest corn producer, had planted 5 percent of its crop, compared to 32 percent last year and the average of 47 percent.

Illinois' planting pace is its worst since 1993, said Joe Victor, vice president/marketing at Allendale.

"Not to say that we're ready to get into a big panic at this point, but I think the closer we draw to the report on the 18th, we're going to have to see some remarkable progress," Victor said.

History shows that farmers are willing to plant, or even re-plant, through the end of the month, but only if prices are still attractive, Victor said.

"The prices are going to have to remain supportive to encourage the farmer to get out there and get after it," he said.

Spring wheat progress also continues to lag well behind the normal pace. The USDA reported plantings at 23 percent complete, up from 15 percent last week but down from 55 percent last year and the average of 59 percent.

Trade guesses were for progress of between 25 percent and 33 percent.

The glaring problem for the crop is in North Dakota, where only 3 percent of the crop was planted, up from 1 percent last week but down from the average of 51 percent.

"You're talking about your number-one producing state," Victor said. "We're getting to the point that, in talking to our clients, by (May) 10th there's going to be some major decisions being made, and that is to plant something else or just go outright preventive planting this year."

He added that "the end-users of spring wheat better be aware that the number-one producer is in dire straits."

Western Milling analyst Joel Karlin said the potential for the crop to lose acres to soy, canola or sunflowers is the biggest threat right now. He said late plantings aren't necessarily "a big indicator of final yield," however.

Analysts said that, as with the corn crop, spring-wheat areas could benefit from warmer, drier weather this week.

"Relatively light precipitation is expected this week for the northern plains aiding the start of planting in ND," Benson Quinn Commodities analyst Kevin R. Kjorsvik said in a report. "Some areas are reporting light progress in fields with sandier soils and more widespread progress could begin this week if rains hold off."

The USDA said 47 percent of the winter-wheat crop was rated good-to-excellent, up from 45 percent last week and in line with the average of 47 percent.

The report showed 27 percent of the crop headed, compared to 21 percent last week and the average of 35 percent.

Kjorsvik noted that "weather in hard winter wheat country will continue to be favourable," with rains blanketing eastern Oklahoma and Kansas this weekend and more rain expected to move across the region this week.

Although the weather has been conducive to a recovery from last month's freeze, damage will be "more severe and permanent" in Oklahoma and Texas. The USDA reported 70 percent of the crop in very poor or poor condition in Oklahoma, up from 64 percent last week, while Texas' rating was 75 percent, up from 73 percent last week.

The USDA said 6 percent of the soy crop was planted, up from 3 percent last week and 5 percent last year. The average is 11 percent at this time of year, and the trade was expecting progress of between 6 percent and 10 percent.

Planting hasn't started in Illinois or Indiana, where the average progress is 8 percent and 13 percent, respectively.

Analysts said the progress figure wouldn't be a factor in the market.