Corn, Soybean Planting Progress Catches Up to Normal
With a rapid planting week last week and an open window for planting corn in the southern two thirds of the Corn Belt, much got done last week allowing planting progress to move to near or above average for both corn and soybeans. This is very bearish for these two crops, as the delayed planting is no longer an issue in corn and soybeans (and any other crop grown in the southern two thirds of the U.S.).
However, as bearish as the planting progress numbers are for corn and soybeans, they are bullish for HRS wheat as HRS wheat planting in the U.S. and Canada are well behind normal. Adding to the bullishness in wheat is a still declining winter wheat crop due to the very poor conditions of the HRW wheat crop, especially in western areas. Details of the bullish wheat numbers and bearish corn/bean numbers are below.
Crop progress numbers released Monday, May 12, included corn planting moving ahead 30% last week to 59% complete, now AHEAD of normal 58% planted. This is very bearish corn as it indicates trend yields or higher are still achievable, as last year only 26% was planted at this time. Corn emerged at 18% vs. 25% normally. Soybean planting is at 20% complete, up 15% last week and now only 1% behind normal at 21%. So essentially, we caught up to normal in planting of corn and soybeans - a bearish development indeed in spite of what has been a very cold spring!
Corn planting is ahead of normal in Colorado (64% planted vs. 56% normally), Illinois (78% vs. 53% normally), Indiana (61% vs. 45%), Iowa (70% vs. 70% normally), Kansas (72% vs. 63%), Kentucky (64% vs. 59%), Missouri (86% vs. 62%), Nebraska (77% vs. 71), South Dakota (52% vs. 43), and Tennessee (87% vs. 76%). We are behind normal in MI (20% vs. 41% normally), Minnesota (31% vs. 62%), North Dakota (3% vs. 33%), Ohio (40% vs. 46%), Pennsylvania (27% vs. 41%), and Wisconsin (20% vs. 41%). So the northern states of Wisconsin, Michigan, Minnesota, and North Dakota all are lagging badly, with North Dakota behind the furthest from average and at risk of having significant prevent planting as they will run out of time earlier than southern states. It is critical for northern states to get their corn planting done in the next two weeks, as after that it will be too late to get the crop mature before the frost date in the fall.
Other crops' progress includes cotton at 30% planted vs. 34% normally, sorghum at 36% planted vs. 33% normally, sugar beets at 31% planted vs. 71% normally, peanuts 26% planted vs. 29% normally, and rice 75% planted vs. 73% normally. Small grains are well behind normal with oats at 56% planted vs. 79% normally, HRS wheat at only 34% planted vs. 53% normally, and barley 55% planted vs. 56% normally. Winter wheat conditions declined to 30% G/E, with the Pro Ag yield model declining again 0.20 bu/acre to 45.67 bu/acre, now well below trend at 47.68 bu/acre. This is quickly becoming a disaster year in winter wheat production, and HRS wheat planting is well behind normal in the U.S. and Canada. Overall, this is bullish wheat and should propel wheat higher today.
We formed downside reversals in wheat and corn Friday, May 9, due to the negative USDA report (which Pro Ag expected), as initial corn carryout projections at 1.7 billion bu and soybean carryout at 330 mb were both larger than expected. Wheat carryout projected at 540 mb was as expected, but smaller than this years projected 583 mb and last year's 718 mb. But the large supplies of feed grains (corn) will keep wheat from being fed in 2014 - meaning less use and less need for excessive stocks. On the positive side, USDA hiked corn demand such that this year's carryout was reduced to 1.146 billion bu. Given the projected carryout numbers, Pro Ag projects corn to drop $1 or more, and soybeans to drop $2 or more by harvest. That's why we are 100% priced in 2014 and 2013 corn/soybeans again before this report. If you are not, we would advise catch-up sales immediately.
For wheat, given the declining winter wheat crop and late planting in HRS wheat country, we still might have a chance of hitting our $7.50 target for advancing sales.
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