USDA's Crop Progress Report Shocks Us All

Greetings from lush, green England! I’m in Sheffield, UK this week visiting our home office. The central part of England is still experiencing cool, wet spring-like conditions. Nothing like I experienced last week in Chicago - it was sunshine and warm temps, which, of course, let the planters roll across the Corn Belt.

US corn futures were trading solidly lower Tuesday morning, in the wake of the bearish report. At time of publishing, July corn futures were down 13 cents and the new-crop December futures were down 8 cents.

USDA’s Crop Progress Report released on Monday afternoon showed an astonishing and unexpected jump of corn planted acres – up to 43 percentage points to 71 per cent planted from 28 per cent a week ago for the top 18 corn producing states in the US. This week’s gain matched the record set in 1992. Trade expectations were for 55 to 65 per cent planted.

Key states – Illinois, Iowa, Nebraska, Missouri, and Ohio all showed major progress, hitting 70+ per cent planted. Of key states, only Indiana was under the mark at 64 per cent planted, Colorado at 59 per cent planted; Kentucky at 56 per cent planted and Michigan at 43 per cent planted.

Corn emergence was up to 19 per cent emerged, well below last year’s 73 per cent and and the 5-year average of 46 per cent emerged.

According to analyst Jim Wyckoff, grain traders are expecting the late corn planting will not significantly impact yield potential. They figure the recent rains in the US Corn Belt that have replenished parched soils are a positive for yield potential which outweighs the negative of planting delays due to the moisture.

However, selling pressure in corn and soybean futures is being limited Tuesday by areas of the Upper US Midwest that still face prolonged planting delays after heavy rains the past two days. Extended weather forecasts for the region also call for above-normal rains for that region.

Soybeans also saw an increase in planting, but not nearly so dramatic as corn – they are up to 24 per cent planted vs 6 per cent last week and 71 per cent a year ago. This should be neutral for bean futures as it was right on target with trader and analyst expectations. However, this is the slowest planting pace for this time since 1996. And several traders had hoped to see corn planting delays in northern states like Minnesota to result in higher soybean plantings - however, Minnesota was one of the states that made great stride and hit the 70 per cent planted mark.

It’s a similar story with cotton – up to 39 per cent planted vs 23 per cent last week, but still lagging behind the year-ago figure of 59 per cent planted.

Have a great week!