Late planting likely
Late planting is likely this spring as cold temperatures continue to plague the US, especially the northern US, this spring. So far planting progress is falling behind normal in nearly all crops this spring as its difficult to plant when soil temperatures as so cool.
So we have a late start as is indicated in the weekly planting progress reports so far. Planting progress reports out Monday, April 8 showed cotton only 5% planted vs. 7% normally, sorghum 16% planted vs. 19% normally, rice 17% planted vs. 20% normally, and oats 35% planted vs. 41% normally. It is showing a late planting season getting underway, and its not likely to change given the cold forecast. The cool weather is good for winter wheat, though, with it improving to 36% rated G/E, up 2% from last week but well below last year's 61% rated G/E.
So we have a cold start to the 2013 crop, with very cold temps keeping farmers from getting into fields and allowing the fields to dry out after a relatively wet winter in many areas. The coming week will continue to be wet for the northern US, and for western areas this precip will be beneficial for the crop potential as it continues to melt away the drought impacts from 2012. As more precip falls in these western areas (including MN, WI, IA, and SD), the drought affected region continues to shrink as we head into the 2013 planting season.
There is no question that the 2013 season will be a late start, but the real question is, will it ever warm up to allow the crop to be planted?
Early planting generally means above average yields are likely, but late planting generally puts the crop on the defensive right away, and requires the crop to be pollinated/blooming during the hotter portion of the summer - especially in southern areas.
To have planting progress delayed is bullish grains, but more bullish corn and bearish soybeans as it also typically means more soybean acreage planted and less corn. So this should support corn prices, which have been hammered recently by the stocks report to end March, which showed stocks were much higher than anticipated in all crops, but especially so in corn.
We will get the April crop report Wednesday, April 10 which will reflect the higher stocks numbers in all grains. That means higher carryout projections in all commodities (wheat, corn, and soybeans) due to the higher stocks numbers. But the real question for the April report is what changes will be made to the South American crop sizes? Recently the drought was broken in mid-Jan to mid-Feb for SAM producers, with wet weather arriving just in time to salvage crops from another drought impacted yield. The question is, how well did they recover? Watch the USDA report for the SAM crop size updates, particularly Brazil and Argentina.
As we said last week, Pro Ag has forewarned producers and traders about the potential for $11 soybeans yet this spring as we move towards summer, and also the potential for $4 corn by harvest time. These two price levels look ever the more possible with the recent descent after the USDA stocks report. We hope producers took protection in the form of crop revenue insurance or puts/hedges, or both for the more aggressive sellers!