The weekly Crop Progress report shows planting progress well behind normal.
The U.S. Department of Agriculture (USDA) reports corn planting at 23-percent complete. Jim McCormick, branch manager of AgMarket.Net, says planting progress is well behind the five-year average.
“We have 23-percent of our crop in the ground, compared to 46-percent. If you break that down into pure dollar, bushel signs, you’re looking at roughly 10 billion bushels of corn that has not been planted,” McCormick said.
Later plant dates put farmers more at risk.
University of Illinois research suggests later plant dates cost farmers bushels and dollars. McCormick says, “We’re reaching that critical phase of getting the crop in the ground and the market is starting to dial that in.”
“Once you start planting past May 10, you have about a eight-point-eight bushel loss below your maximum yield in Illinois,” McCormick said. ” (If) you plant on May 20, you’re losing about 17 bushels off the max yield in Illinois. (If) you get to May 30, we’re talking almost 28 bushels off the max yield in Illinois. Each day we don’t plant, the top incomes off our crop.”
McCormick assesses yield loss, as well as prevented planting. He factors the two elements into corn carryout.
“Say we take a million and a half acres of prevent plant, due to flooding going on around the Midwest,” McCormick said. “That’s roughly another 350 million bushels of corn that comes off the market. You have a yield drag – two to four bushels off the national yield – because of the delayed planting. You’re potentially (looking at) another 350 bushels of corn not being produced. The combination – 700 to 800 million bushels – changes what looks like a bearish carry out, of about 2.2 billion, to 1.4 billion bushels, which would change the psychology of the market, if wet weather continues.”
McCormick realizes this scenario is bullish, and does not believe it will play out in this Friday’s World Agricultural Supply and Demand Estimates (WASDE) report. Rather, he suggests the aforementioned scenario will play out over the next four to six weeks.
“USDA is going to update the old crop carryout. The average guess is for it to come in (at) 2,045,000,000, up from 2,035,000,000 last month,” McCormick said. “They’re also going to give us their first ‘guesstimate’ of new crop supply/demand tables. Historically, they use acreage numbers they gave us at the end of March and use a trend yield, which is roughly 177. With the delayed planting, they may tweak that down a little bit. The average guess for the carryout is going to be a little over 2.1 billion bushels.”