USDA Report and Planting Progress - Monday, 09 April 2012

Tomorrow we have another USDA report.  The April Crop Production and World Supply and Demand Estimates report is set to be released at 7:30 a.m. CDT.  In this report the updated South American numbers will be very important to Traders, as will how the USDA estimates usage of the March 1st stocks.  After all of the hype and anticipation with the March 30th reports it is easy to disregard the fact that we have yet another important USDA report coming out only 10 days later, but as we have all observed, these reports in fact do impact our grain markets significantly.  Many ag advisors believe that this report will again show that old crop corn and soybean stocks are shrinking and exports continue to show strength especially in the bean complex.

Dry conditions and warmer than usual temperatures have convinced many farmers from across the Midwest to begin their spring planting earlier than ever before.  University of Illinois crop sciences professor Emerson Nafziger reminds farmers though that according to planting data from the past 5 years, “Planting on April 20 produced the highest yield of 201 bushels an acre and planting on April 30, May 20, and May 30 yielded about 2,7,15 and 27 bushels less than the highest yield respectively.  If this year follows the same pattern, corn planted on April 1 or April 10 will yield 7 and 2 bushels less respectively, than corn planted on April 20.” 

 

La Niña continues to influence our weather patterns and is expected to continue until a more neutral (ENSO) pattern sets up during April/May.  Currently the trend suggests a better chance of ENSO persisting throughout the summer than an El Niño pattern developing.  El Niño generally translates to above-trend-line yields throughout the Midwest but a shift away from La Niña to ENSO diminishes the change of below-trend-line yields which is also good news for producers.

Soils found in the U.S. on average hold 10 inches of water within the top 5 feet.  This moisture is the reserve on which our crops survive during short, occasional periods of drought.  Surprisingly, just receiving normal rainfall won’t supply our growing crops with enough moisture to prevent significant losses in yield.  In some areas of IA, MN, ND, SD and NE the soil is unable to store any moisture reserve at all!  If the current lack of plentiful rainfall continues in these drought regions through June 1st and these states only receive “normal” rainfall during the summer, the U.S. yield could fall by a minimum of 200 mb, and if additional stresses occur that number will rise.

    

There was encouraging news today from the EPA.  We know that E15 can safely be used safely in newer vehicles but until now it had not officially cleared any specific type of E15 fuel for sale at the pump.  This now means that E15 can be on the market by this summer, in time for the busy vacation and travel season, some stations around the Midwest are already prepared to begin selling E15 fuel immediately.

FSA has extended the CRP signup deadline that was set to end on April 6th until April 13th, 2012.  There is a lot of interest from farmers to signup acres and due to that response they have extended the deadline by one week.  Acres accepted into the program will become effective on October 1st, 2012.  For more information go to:www.fsa.usda.gov/crp.

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