Early planting of corn, soybean, and wheat could equal higher yields, analyst says

The one constant so far is strong demand from China.

It’s finally spring! Weather is warming, snow is diminishing, and it’s time to get back to planting and growing a crop.  

With spring, also comes the annual USDA acreage and stocks reports. Acreage intended is by far the most important factor as we look ahead to the new year. This is the time when focus moves from South American (SAM) production to the U.S./Northern Hemisphere. Since the United States is the world’s largest exporter of all crops, it becomes an important factor for the market. It looks like the U.S. will have an early planting year, as weather is warming and drying up, which will allow the Corn Belt to get going on planting early this year. We could have most of the corn planted in April.

Weather is calling for below-normal precip and above-normal temps over most of the U.S. the next two weeks. Specifically, it will be driest in the northwest 75% of the Corn Belt, and more normal precip in the southeast 25% the next seven days, and then the eight- to 14-day has below-normal precip in the northwest half of the Corn Belt, and normal in the southeast half. Temps will be mostly above normal the entire 14-day period in the Corn Belt, with only the southeast seeing some normal temps in the next seven days as the heat moves in from west to east.  

South America (SAM) is seeing mostly below-normal precip in the southern 75%, but normal in the northern 25% (the Amazon area). Temps will be mostly below normal in Brazil and above normal in Argentina – not good weather for the late, second-crop corn.  

Finally, after nearly a week, the Suez Canal is cleared. It takes only one ship to block an entire important port, we’ve learned. 

On Wednesday, March 31, we get the much anticipated USDA March 31 acreage and stocks report. There likely will be some surprises, but the difficult thing is predicting the unpredictable USDA… What will they get right this time, and what will they get wrong? 

Farmers are planting more of everything – wheat, corn, and soybeans – but mostly corn and soybeans.  

With wheat prices sagging recently, Pro Ag will bet USDA will miss some of the shifting from HRS wheat to corn/soys. With early planting likely in the coming few weeks of warm/dry weather, corn acreage might be higher than USDA guesses this time.  

Private estimates are showing higher corn and soybean acreage than the February USDA estimates as well. It’s likely acreage will be above the February USDA numbers as prices have remained high another six weeks since that report. 
 
Bottom line: Planting is likely to be early given the forecast, and early planting means higher corn, soybean, and HRS wheat yields.  

Also, more acreage planted (less PP) and possibly more corn and less soybeans with early seeding. The weather improved tremendously since mid-January in both the U.S. and SAM. So, the supply outlook has improved, which is why prices are now drifting lower. I expect more of the same – unless a drought kicks in after planting. If 2% to 5% more is planted, but yields are 5% to 10% lower, supplies are still down. The one constant so far is that demand remains strong from China.  


Ray can be reached at raygrabanski@progressiveag.com.  
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Ray is President of Progressive Ag Marketing, Inc., a top Ranked marketing firm in the country.  See http://www.progressiveag.com for rankings and link to data from Top Producer Magazine and Agweb.com. 

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