US - US corn plantings are well behind average progress for this point in the season, with very few states having begun planting, should we be concerned?
Although planting has begun in some southern states, including Texas, Louisiana, Mississippi and Arkansas, progress is well behind the average, and last year’s pace.
At a glance...
Corn planted area for all purposes in 2015 is estimated at 89.2 million acres, down 2 percent from last year.
If realized, this will be the third consecutive year of an acreage decline and would be the lowest planted acreage in the United States since 2010.
Soybean planted area for 2015 is estimated at a record high 84.6 million acres, up 1 percent from last year.
Compared with last year, planted acreage intentions are up or unchanged in 21 of the 31 major producing States.
All wheat planted area for 2015 is estimated at 55.4 million acres, down 3 percent from 2014.
The 2015 winter wheat planted area, at 40.8 million acres, is down 4 percent from last year but up less than 1 percent from the previous estimate.
All cotton planted area for 2015 is estimated at 9.55 million acres, 13 percent below last year.
If delays persist, this could impact US corn planting intentions, which came out slightly higher than the market expected on Tuesday.
However, it is still early in the season and there is plenty of time for conditions to change. As has been seen in the past, planting progress can pick up considerably within a week.
For example, corn plantings increased by 43 percentage points within a single week in 2013. Furthermore, the weather in the June/July period will be pivotal in determining yields and hence production.
Until then, markets are likely to react to any short term news regarding US corn plantings which could lead to some price volatility.
US corn drags down UK wheat
The bearish news for US corn resonated across international grains futures, with both UK wheat and Paris corn Nov-15 futures following US corn Dec-15 futures downwards.
In sterling terms, it was the largest daily fall in US Dec-15 corn futures in two years. Nonetheless, this simply offset gains made in late March, with US Dec-15 corn futures, in sterling terms, remaining within an £8/t range since early November.
However, UK May-15 wheat futures have since made gains this morning after closing lower last night.
Further volatility in US corn futures is likely to impact UK wheat futures in a similar way before greater clarity of the size of the US corn crop is obtained come harvest 2015.
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