Comparing Planting Pace to Yields and Cool Weather Continues - Wednesday, 17 May 2017

The new Ag Secretary Sonny Perdue is scheduled today to appear before the House Agriculture Committee to discuss the current, “State of the Rural Economy”.  This meeting is expected to give the committee important insight regarding the 50% decline in farm income over the past 4 years and give Perdue the opportunity to give his perspective on what is needed in the 2018 Farm Bill.

Corn exports have been strong this year so why haven’t we seen even larger exports given our current supply levels and low prices? The reason this is the case has to do with the fact that the U.S. has spent several years developing an ethanol program and in the process has lost a large volume of previously well-established customers. In the meantime those customers have found other suppliers making it difficult for the U.S. to regain this business.

The large corn inventory in China, nearly 10 billion bushels, will take many years to use up, possibly up to 10 years.  This may mean a lower demand of U.S. corn by Chinese buyers for that same timeframe.  One bit of positive news is the recent decrease of import taxes on corn coming into China which has analysts thinking that China may be in need of high quality corn to use for blending purposes.  They have not made any announcement regarding where these bushels would be sourced from though if they do begin to increase their buying.

Recent research conducted by FC Stone compared the various pace of both corn and soybean planting to percent of trend yields over the past 37 years.  Their data showed that there is not a clear relationship between the planting pace and the national average yield. For this specific week in May we are at 70% planted which, in previous years, has produced corn yields that have ranged from 110% of trend to 90% of trend which represents a yield variation of anywhere from 154 to 187 bushels per acre average. *(Soybeans show even less of a relationship between planting pace and final average yield) For example the growing years of 2012 and 1988 were 2 of the earliest planted years and were also 2 of the lowest yields ever as percent of trend. The years of 2013, 2014 and 1984 were very slow paced and each of them made trend or higher and the slow, wet starts of 1983, 1993 and 1995 all delivered below trend yields.

This week’s USDA’s report on Planting Progress showed significant increases in progress for both corn and soybeans.  Corn currently sits at 71% planted which is ahead of the 5 year average pace, soybeans are 32% planted which is a 14% increase from last week and on pace with the 5 year average. 

The current weather pattern does not offer the market any reasons to get too excited yet, the Western Corn Belt is expecting up to 3 inches of rainfall this week and the Eastern Corn Belt is forecast to receive rain this weekend. The current emergence for corn is slower than normal and a cool/cold pattern is expected for the next 2 weeks which could hamper further emergence and delay pollination into the hotter, drier weeks of summer. The maps below show the 8 to 14 day trends, the temperature trend is shown in the top map the the precipitation trend is shown in the 2nd map, these maps are from the National Weather Service.


This map shows the predicted amounts of precipitation expected across the country from Monday, May 15th through Saturday, May 20th.


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