FORT COLLINS, Colo. (Reuters) - May is typically the busiest month for U.S. corn planting, but many Midwestern farmers are sidelined waiting for the rain to stop and the fields to dry out after a record wet off-season.
Should planting be delayed too much, corn acres are bound to decrease and both growers and analysts alike fear that yields could ultimately suffer as well.
According to the U.S. Department of Agriculture, some 15 percent of the country’s corn crop had been planted by April 28, identical to a year ago and behind the five-year average of 27 percent.
On average over the last decade, about 35 percent of the U.S. corn crop is planted by May 1. That number moves to 71 percent by May 15 and at the end of the month, close to 94 percent of the corn should be in the ground.
Last year’s sowing also started slowly and progressed behind normal pace until around May 20, though planting was only 5 points behind normal as of May 6.
This year’s weather conditions are very different from a year ago. The soils are much more saturated now since accumulated precipitation since September in the Midwest is the highest in records back to 1895. Last year’s precipitation was very close to normal.
Without waterlogged soils last year, Midwestern farmers had to wait out the second-coldest April on record for soils to warm to proper planting temperatures. Progress was helped by the fact that May was the warmest on record.
But May 2019 is unlikely to be very warm or dry, at least in the first half, which may prolong field delays until at least mid-month. As of early Thursday, the seven-day forecast called for plentiful rainfall to continue for the Corn Belt, with a focus in the East.
Back in March, a powerful late-winter storm caused chaos in the U.S. Plains and Midwest, flooding parts of Nebraska, Iowa, and Missouri and adding even more water to the already-taxed U.S. river system. At that time, there was a lot of concern that things may not return to normal in time to plant corn.
But now, the Eastern Corn Belt is having more troubles than the West. No. 2 producer Illinois was only 9 percent planted by Sunday against an average of 43 percent, and No. 5 Indiana was 2 percent planted versus and average of 17 percent. Wet weather continued this week and those gaps will likely widen in the next report.
In Nebraska, some 16 percent of corn was planted by Sunday versus an average of 23 percent. Iowa’s progress had reached 21 percent versus 26 percent average, and Missouri was 45 percent planted versus the average of 55 percent.
IMPACT: ACRES AND YIELD
It is not uncommon for U.S. planting concerns to arise each year, but those kinks have usually been ironed out some way or another in recent years, and traders are aware. However, if the weather does not improve, actual problems may arise, either in lost acres or yield risks to late-planted corn.
Lately, it has not been typical for planted corn acres to decline from USDA’s end-of-March planting intentions report to the acreage report published at the end of June. In the previous 15 years, reported corn acres declined from March to June only three times (2010, 2014, 2015).
However, final corn plantings came in lower than March intentions six times within the last 15 years. Much of that was driven by larger-than-normal prevented plantings, which arise when an insured crop was unable to be planted within the specified time frame given in the insurance policy. The largest amounts of prevented corn acres in recent years were in 2011, 2013 and 2015.
The largest recent decline in corn acres from March to June was nearly 1 million in 2010, though 1993 and 1995 registered declines of 2.2 million and 3.3 million, respectively. From March to final, the biggest recent reduction was 1.9 million acres in 2013. In 1993 and 1995, those losses were 3.2 million and 3.8 million acres, respectively.
This March, USDA pegged U.S. corn plantings at 92.8 million acres, up 4 percent from the previous year.
Market participants have also questioned the effect of late corn planting on the yields. Many farmers say that late-planted corn often yields lower than on-time corn, but this question is highly nuanced as it depends on many factors, mainly the summer weather.
A recent study from the University of Illinois showed that when late corn planting is more than 10 percent above average, yields were more likely to be below trend. There were six years since 1980 where that was the case, but only one year ended up with above-average corn yields (2009). The study, titled Late “Planting and Projections of the 2019 U.S. Corn Yield,” was conducted by Scott Irwin and Todd Hubbs and published on May 1 by the University of Illinois.
The study cautioned that summer weather would likely be more important than planting delays in determining corn yield. Two of the six years mentioned above (2002, 2013) featured unfavorable hot and dry spells that were probably a bigger culprit for lower yields.
The 1993 and 1995 planting campaigns were the slowest of the group and the yields fell more than 10 percent below trend. But comparing these years with 2019 may not be best since seed genetics and management practices have come a long way since then and corn is likely more resilient nowadays to varying weather conditions.
The opinions expressed here are those of the author, a market analyst for Reuters.
Editing by Matthew Lewis
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