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US: Early planting, field crop yield indications may be moving market

Aerin Curtis

By Aerin Einstein-Curtis

04-May-2016
Last updated on 04-May-2016 at 15:35 GMT2016-05-04T15:35:51Z

'Good moisture and quick planting and if you put those two pieces together that’s a great start to the corn season at or above trend line yields,' says Iowa State University economist, Chad Hart. Image © iStock.com/larryhw
'Good moisture and quick planting and if you put those two pieces together that’s a great start to the corn season at or above trend line yields,' says Iowa State University economist, Chad Hart. Image © iStock.com/larryhw

The potential for a good US feed crop yield may be helping move the market as farmers look toward the fall, says an economist.

Monday’s crop planting report from the US Department of Agriculture (USDA) offers indicators that the 2016 corn crop may be at or above average yield said Chad Hart, Associate Professor of Economics and Crop Markets Specialist Extension Economist with Iowa State University.  

“Earlier planted crops give that crop more time to grow and mature may lead to better yield given normal moisture,” he told FeedNavigator. Currently the corn crop is about 15 percentage points ahead of average and the soybean crop is two percentage points ahead, he added.

Farmers have been talking about recent market rallies and a desire to take advantage of current prices, he said. “If we’re looking at good planting, potential lower prices I’ll take advantage of what may be a higher price today,” he added.

“They’re trying to figure out how to put in price protection,” he said. But, farmers are also looking for ways to maintain some flexibility if prices do rise in the fall.

Farmers are likely looking to the second half the growing season to see what weather conditions bring, said Hart. As enough time remains that conditions could change before either planting or the growing season end.

Last year corn and soybean crops also saw an early start in planting, but excessive moisture starting in early-May delayed or damaged some crops, he said. This year one concern is how quickly conditions might dry out during the summer.

“We’ll continue to watch planting process,” he said. “We still have half the crop to get in and does it get in for the early part of May or [is there] some delay? And moisture conditions are great but could it slow things down?”

Feed crop plantings           

In corn, about 45% of intended acres have been planted by the week ending May 1, even with the uptick in acres from last year, reported the USDA.

“As we look at the state level numbers it’s mixed, [and] most states are running ahead of schedule,” said Hart. “Illinois and Iowa are both running well ahead of usual pace for planting – Illinois has two-thirds of the corn crop planted and Iowa is at almost 60% – that says that you’ve got your two largest producing states well ahead in terms of that planting.”

The mild winter many states experienced allowed for the accumulation of soil moisture, he said. Although there were some concerns about moisture levels, a dry spell in the Midwest prior to the planting period aided an early start.   

However, there are a few states including Michigan, Colorado and South Dakota behind where they usually are this point in the planting season, he said.

“Good moisture and quick planting and if you put those two pieces together that’s a great start to the corn season at or above trend line yields,” he said.

Nationally, soybeans also are ahead of the multi-year average, said Hart, but slightly behind with where they were last year at this point. “But, we had an incredible run at the end of April last year especially in Missouri,” he added.

Large soybean growing states like Iowa and Illinois are running at or ahead of average, although Indiana is behind he said. The state to watch as the planting season continues through May likely will be Missouri.

At 11% planted, the state is running ahead of where it was at this time last year and on average, reported the USDA. And, in the March prospective planting report the state had increased the amount of soybean intended by 121% to about 5.5m acres.

Another factor to watch is the maturation of the winter wheat crop, as that can bring challenges for planting, said Hart.

“A lot of that is heading now, and we’ll watch to see when that harvest rolls in especially in the latter half of spring planting,” he said. “There’s a transition that happens between winter wheat and spring crops that they have to juggle as they move forward.

Additionally, the spring wheat planting is more than half done and ahead of where it was on average, said the USDA. However, with about 54% of the crop planted, it is slightly behind the 69% that had been planted at this time last year.

Sorghum planting is behind both where it was at this point last year, and the multi-year average, said the agency. But oat and barley plantings are ahead of where they usually are at this time of year.

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