May 27, 2009

US farmers made good progress, as expected, on both corn and soy planting following a full week of dry weather, but in both cases remain behind schedule, the US Department of Agriculture said Tuesday (May 26).

 

The government's crop progress report also showed that winter wheat conditions declined slightly while spring wheat plantings continued to progress but are still behind schedule.

 

The USDA said farmers had completed 82 percent of their corn plantings as of Sunday, up from 62 percent the prior week but down from the five-year average of 93 percent. Analysts had expected progress between 80 percent and 85 percent.

 

Illinois and Indiana both reported strong progress, but they have had the most ground to make up. Illinois plantings were 62 percent complete, up from 20 percent the prior week but down from the five-year average of 96 percent. Planting in Indiana was 55 percent complete, up from 24 percent the prior week but below the average of 89 percent.

 

Iowa, the nation's top corn producer, was 97 percent complete, up from 90 percent the prior week and in line with the five-year average.

 

There were no big surprises in the numbers but they still leave questions about the crop unanswered, analysts said.

 

Joel Karlin, analyst for Western Milling, said the questions now for the market are potential replantings because of excess rains, and "spotty emergence."

 

Those who have to replant will probably have to shift to a shorter-season, lower-yielding variety, he said.

 

"At this point I think it's very difficult to quantify how much replanting will be going on," he said. "It's the same thing as trying to ascertain how much flooded acres there were last year."

 

Farm Futures analyst Arlan Suderman said with 15.3 million corn acres still unplanted, he would expect corn acreage to be as much as 1.5 million to 2.5 million acres below the USDA's spring planting intentions report estimate.

 

He added that in recent history there have been four years with similar planting progress to this year, and that the crop in three of those years produced below-trendline yields.

 

The USDA said 48 percent of the soy crop was planted, up from 25 percent the prior week but down from the five-year average of 65 percent. Analysts had expected progress of 45 percent to 50 percent.

 

As with the corn crop, Indiana and Illinois remain far behind schedule. Illinois had planted 12 percent of the crop, up from 1 percent last week but down from the average of 69 percent. Indiana had planted 25 percent, up from 6 percent the prior week but down from the average of 64 percent.

 

"I think it's supportive, but I don't think the trade's going to get too excited yet about soy," Suderman said.

 

Other states lagging well behind schedule include Michigan, Missouri, Arkansas, Kentucky, Tennessee, Ohio and North Dakota.

 

Karlin noted the sluggish planting and development pace in the South was "a little disconcerting." Emergence in Arkansas was 25 percent, down from the average of 45 percent and in Tennessee none of the crop had emerged, compared to 25 percent last year.

 

But progress in western states, including Iowa, Nebraska and Minnesota, was good, he said.

 

The USDA said that 79 percent of the spring wheat crop was planted, up from 50 percent last week but below the average of 95 percent. Analysts had expected plantings to be around 74 percent complete.

 

Suderman noted that Minnesota and North Dakota continue to lag. Minnesota had planted 71 percent of the crop, compared to the average of 96 percent, and North Dakota had planted 69 percent of the crop, down from the average of 94 percent. Recent rains in both states could continue to hinder planting, he said.

 

"I think we're probably vulnerable of anywhere between 3/4 million to 1 million acres not getting planted to spring wheat, and there is a historical tendency for below-trend yields when it's planted this late, so that does provide support," Suderman said.

 

The USDA said that 45 percent of the crop had emerged, up from 21 percent last week but down from the average of 77 percent.

 

The USDA said 68 percent of the winter wheat crop was headed, up from 56 percent the prior week but down slightly from the average of 71 percent.

 

Analysts noted a decline in the crop's condition, however, particularly in Kansas. The downgrade "was a little surprising," Karlin said.

 

The report showed that 45 percent of the crop was in good-to-excellent condition, down from 48 percent the prior week. The crop rated good to excellent declined in Kansas to 47 percent from 54 percent, and in Nebraska it dropped to 69 percent from 77 percent.

 

Analysts had expected a slight increase of one to two percentage points in the portion of the crop rated good or excellent.

 

The report demonstrates earlier weather problems in the Plains, Suderman said. A hard freeze followed by excessively wet temperatures hurt the crop in key growing areas of north-central Oklahoma and south-central Kansas.

 

"We're getting increasing reports now, even out of south-central Kansas of some wheat being destroyed, collecting insurance payments and trying to plant alternative crops," Suderman said.