June 1, 2009

 

 

Most analysts are expecting Monday's (June 1) crop progress report to show decent crop condition ratings for corn, but with anywhere from 4 percent to 9 percent of the crop yet to be planted.

 

The US Department of Agriculture will release the crop progress report after trading closes Monday, and the report will likely include condition ratings for the first time this year, analysts said.

 

Estimates for the portion of the crop rated good-to-excellent range from 60 percent to 75 percent, compared to 63 percent last year, when a wet spring and major delays in the central and western Corn Belt got the crop off to a slow start. The five-year average is around 69 percent, analysts said.

 

Gauging the progress of the crop is tricky this year because of the divergence between conditions on either side of the Mississippi River. Planting is all but complete in the western Corn Belt, but has continued to struggle in the east due to a very wet spring.

 

"With the amount of rain that we've had, what's up should look pretty good," said Arlan Suderman, analyst for Farm Futures. "I would anticipate the good-to-excellent on corn would be somewhere up around 65 to 67 percent."

 

Prime Ag Consultants analyst Paul Beery said the percentage of the crop rated good-to-excellent could be anywhere from the upper 60s to mid 70s.

 

"Even where we are here in southern Wisconsin, last week we got a lot a lot of work done," Beery said. After unseasonably warm weather for a couple days last week, "the ground was warm and the crop pretty much just popped right out of the ground."

 

But other analysts said the rating won't look so good. Mike Zuzolo, senior analyst for Risk Management Commodities, said he doesn't expect conditions to be much better than last year.

 

"I've heard many stories of very bad stands in (Illinois) and (Indiana) this week due to drowned-out/too wet conditions," he said in an email.

 

Allendale Vice President/Marketing Joe Victor projects a good-to-excellent rating of 60 percent. But along with some other analysts, he added that the rating might not carry a lot of significance at this stage of the season.

 

"I'd like to see more emergence, especially in the eastern corn belt, to solidify what we're actually dealing with," Victor said. He said the USDA will issue a crop condition rating as long as emergence exceeds 70 percent. Emergence was at 52 percent through Sunday.

 

Suderman said it would take a good-to-excellent rating outside the 60 percent to 75 percent range to spark much of a response from the market.

 

The planting progress will again be closely scrutinized this week, analysts said. After progress of 82 percent through Sunday, analysts project plantings between 91 percent and 96 percent in Monday's report.

 

Suderman, who expects progress at 91 percent, said "that still leaves a good eight million acres planted as we head into June with rains arriving probably on Tuesday and Wednesday. We'll probably get another five, six million of those planted."

 

Analysts say that similar to last year, traders might have to be patient in waiting for a clear picture of the crop to emerge because of late planting. One storyline that's already clear, they say, is the "tale of two crops," and whether they will balance each other out.

 

"Certainly we're off to a poor start," said Don Roose, president of US Commodities in West Des Moines, Iowa. "Can the west make up for the east? That's going to be the bottom line all year."