CHICAGO (Reuters) - The latest outlook from the U.S. government predicts warmer-than-average weather that could have a game-changing impact when the U.S. corn and soybean planting campaign gets underway in a few weeks.
The U.S. Climate Prediction Center on Thursday said the warm trend will start in April and strengthen through June, except in the Dakotas and Minnesota. (reut.rs/2mNRCVf)
Warm weather in April is particularly favorable for the planting of corn, which is the first of the United States’ two primary exported crops to be sown.
Springtime weather is always a big factor in how many of the intended corn and soybean acres actually get planted. If April and early May weather forecasts start to look like a corn farmer’s dream, analysts might be more inclined to maintain or even raise corn acreage predictions.
But CPC's precipitation forecast could work against corn, as the U.S. agency has flagged the possibility of a wet spring in the Dakotas and the Upper Midwest - areas that usually cannot afford to plant corn too late for fear of an early fall freeze. (reut.rs/2nsvbrS)
A rain-induced delay in corn planting could propel farmers in these swing states to favor beans, in which case soybean plantings over 90 million acres would almost seem guaranteed.
Most market analysts expect planted corn acres close to 90 million acres, down from last year’s 94 million. But soybean plantings are generally predicted between 88 million and 90 million acres this spring, a drastic increase from the record 83.4 million one year ago.
But this year, with Chicago soybean futures elevated much more than normal relative to corn futures, planting the oilseed is likely to provide the U.S. farmer with higher returns. As such, market analysts see soybeans as the clear choice over corn this spring, which is why some predict that soybean acres could top corn acres for only the second time in U.S. history.
Early spring warmth helps to moderate soil temperatures and reduce any excess saturation that could be leftover from winter snow melt. Soil temperatures need to reach 50 Fahrenheit (10 Celsius) for the corn seed to properly germinate once planted.
The post-winter dry out is important because under drier, unsaturated conditions, farmers are more comfortable rolling their heavy machinery out into the fields and the planting process is more quick and efficient – given that the warm weather is not also accompanied by a rainy pattern.
U.S. corn planting progress generally moves along faster than usual under warmer conditions in April and May. This often results in additional acres being planted from what was intended because of the excellent fieldwork opportunity that is presented.
Corn planting has already begun in the minor southern states but will ramp up in the heavy hitters by mid-April. Farmers in Illinois are usually just under halfway through by the end of April, while the Iowa corn effort may be around 40 percent complete. Most states will have reached about 90 percent planted by June 1. (reut.rs/2mxayWQ)
If the Upper Midwest and Northern Plains are hit by excessively wet springtime weather with very few breaks in between, corn acres would almost certainly be headed south in favor of soybeans. North Dakota, South Dakota, and Minnesota combine for just under 20 percent of both corn and soybean production at the national level.
But if the waterworks were to continue through June, this could have a negative impact on both corn and soybean acreage.
One of the most recent examples of the effects of a wet spring came in 2013, where cool and rainy conditions persisted throughout much of the same region. Prevented corn and soybean acres in North Dakota and Minnesota alone totaled nearly 1.9 million acres, and national corn and soybean plantings fell about 2 million and 1 million acres, respectively, from the June acreage report to the final number.
By comparison, prevented corn and soybean acres totaled only 25,000 acres in North Dakota and Minnesota during the largely favorable 2016 planting season.
Additionally, heavy spring rains can also partially or fully drown out newly sown fields, leading to emergence troubles. Both acreage and yield can suffer under this scenario, even if farmers are able to replant some of the lost acres.
May is the primary month for soybean planting in the United States. The core Midwest states of Illinois, Iowa, and Indiana open the month with less than 10 percent of the crop planted and enter June between 70 and 85 percent complete. Soybeans double-cropped after wheat – common in the Mississippi Delta states – make the biggest push during June. (reut.rs/2nssqGY)
The fact that CPC does not have a dry bias at all across the Corn Belt could mean the opportunity for a wetter pattern to develop over more of the prominent growing regions – something to bear in mind going forward.
(The opinions expressed here are those of the author, a market analyst for Reuters.)
Editing by Lisa Shumaker