Weather

U.S. corn planting is sailing toward the finish line. As of May 17, 80% of the U.S. crop has been planted. That’s up 13 percentage points from last week and nine percentage points above the five-year average for the middle of May, according to USDA's latest Crop Progress report. Ahead of the report, market analysts were expecting corn planting to be 82% to 84% complete. Illinois, Iowa, Minnesota, Missouri, Nebraska, North Carolina, Texas and Wisconsin are all 80% planted or more. North Dakota and Pennsylvania are the furthest behind in planting with 20% and 15% planted, respectively. Corn emergence is at a normal pace, with 43% of the crop emerged. For soybeans, 53% of the U.S. crop is in the ground. That is up from last week’s 38% planted. The five-year average for mid-May is 38% planted. Ahead of the report, market analysts were expecting soybean planting to be 51% to 54% complete.Iowa, Louisiana, Minnesota and Nebraska are all 70% completed or higher for soybean planting. On the flip side, North Dakota is currently 9% planted in soybeans, followed by Missouri with 27% planted. Both paces are significantly behind each state’s five-year average. Currently, 18% of the U.S. soybean crop is emerged, which is ahead of the five-year average of 12% emerged by mid-May.For cotton, 44% of the U.S. crop is planted, which is in line with the average planting pace. The U.S. spring wheat crop is 60% planted, which is behind the five-year average of 80% planted by mid-May. The U.S. sorghum crop is 32% planted, which is a normal planting pace.  

A simple equation of the 2019 planted corn acres (90 million) and the total corn prevent plant acres (11.4 million) tops more than 100 million acres. With all the uncertainties around trade, fall fieldwork, African swine fever and farm finances, could farmers lean toward that huge number in 2020? Our stable of market analysts weigh in.

“I don’t think we’re going to see 100 million acres of corn, but we certainly are going to see more after so many acres went to prevent plant this year. Farmers are probably going to favor corn versus beans again in 2020. The bigger thing to think about is we still have a lot of the corn crop sitting in the field. Farmers dealt with a lot of mud getting it in and getting it out. A lot of fields that went to prevent plant are full of weeds. They’re going to have a lot of cleanup before they can start laying down fertilizer and putting seeds in the field," says Erin FitzPatrick Grain & Oilseed, Analyst at Rabo AgriFinance.

  “We all need to remember liquidity ratios continue to deteriorate for a lot of producers and, quite frankly, it’s not cheap to put corn in the ground. If the price ratio is 2.2:1, then yeah, you’re going to plant a heck of a lot of corn. If the price ratio goes above 2.4 or 2.5, I think with the amount of cash people have in their pocket, there are still going to be a lot of soybeans planted. If you don’t want to see 100 million acres of corn, you’ve got to root for a bean rally. It’s expensive to put corn in the ground.” - Matt Bennett, AgMarket.Net   “We could plant 100 million acres of corn next year, but I do not expect it at this point. I think we’re probably looking at bringing those prevent plant acres back and adding to both corn and soybeans in 2020. The current price relationship would suggest both of them equally gaining, which would pull corn acres up to around 95 million. Soybeans could certainly jump back toward the mid to upper 80s. There’s a lot of unknowns yet and the biggest is the China trade deal. If in fact we would get corn, ethanol and DDGs in a trade deal, then suddenly we would realize the world corn balance sheet is tighter than what the market is currently trading. It just needs that type of incentive to see a spark.” - Arlan Suderman, INTL FC Stone

Harvest 2019 may be far from over for some farmers in the upper Midwest, yet as the calendar flips to 2020, the market’s focus will shift to South America. If farmers are hoping for a market run fueled by imperfect weather in South America, some meteorologists say that may not be in the cards this winter. “The weather right now in South America is turning around,” says Drew Lerner of World Weather, Inc. “It looks very normal to me for both Brazil and Argentina…. The only place I see a problem in South America is going to be northeastern Brazil; that area’s not going to get a lot of moisture. That's about 10% of the soybean crop, and that area up there is going to stay fairly dry.” He says years like 2018 produced dryness in South America, which in turn, caused a weather scare to boost commodity prices. At this point, Lerner just doesn’t see a similar scenario panning out. “If we're looking for market support because of a failing crop in South America, this isn't going to be the year for that,” says Lerner. Now, the second-season corn crop down in Brazil will possibly have some issues, but that's all predicated on how quickly the rainy season ends in March and April and if we get an extended rainy season, planting late is not going to be an issue. We really won't be able to answer that part of the equation for a few months.” As Lerner thinks South America could be poised for a good production year, other meteorologists are also paying attention. USDA meteorologist Brad Rippey says without a major weather event to expect status quo. “That's the way it appears,” says Rippey. “Without El Nino or La Nina to talk about for South America, you don't really have a good, strong forecast signal. Those are the early indications, as the equivalent in the southern hemisphere for December 1 would be June 1, so it's fairly early in the growing season. The only significant dryness we've seen in the soybean belt has been in the interior, northeastern part of Brazil. Most other areas have had ample rainfall.” Rippey says temperatures have been creeping on the high side in areas but not enough to severely impact production at this point. “So far, early in the season, things are moving along pretty well and no signs of any alarm bells in South America,” says Rippey.

Michael Stenzel is harvesting outside of Hamburg, Iowa. It’s a surprise after the spring he describes in one word. “Hell, plain and simple,” said Stenzel. Stenzel’s bins busted during March. They remain with the grain still there as well. “They are still sitting there, rotting, decaying and smelling,” said Stenzel. He is looking into federal disaster aid relief passed by Congress, but doesn’t know what he will get just yet. Stenzel said, “[The] payment limitation is $125,000. The way I figure it, I lost close to $460,000. I’m not going to complain because they didn’t have to give us anything.” “The bin compensation program [in the disaster aid verbiage] should go relatively smoothly once the proper paperwork and data checks are involved,” said Farm Journal Washington Correspondent, Jim Wiesemeyer. Wiesemeyer says no checks have been given out yet. Back in Iowa, some farmers can’t get to every piece of land. “We are trying to repair the ground,” said Hamburg, Iowa farmer, Mike Woltemath. “Some ground had holes washed in it.” “Some of it will probably never be farmed again,” said Woltemath. “There will be some of it that’s damaged beyond repair.” An Omaha representative with The Army Corps of Engineers tells AgDay the levees along the Missouri River near Hamburg will be under construction for at least two years. It brings up some questions, especially about crop insurance. Woltemath said, “Will they consider our ground a high risk if the levees are not back to the full height?” Stenzel said, “If the levees aren’t put back to the way they were, are they going to even give us insurance? I’ve told all of my landlords that I farm for on the river bottom that if I can’t get insurance, I won’t farm it.” "A grower does have coverage into the next season in cases where levees were breached or situations like that,” said Billy Moore, COO of Ag Resource Management. “That ground would still be insurable but in some cases, it can be re-rated as high-risk land.” Moore says those cases and rates depend on the Risk Management Agency. “Those rates commonly can run three, four to five times higher than the regular rated land that’s not high risk in that same county,” said Moore. “Those rates are redone every year by the Risk Management Agency in November.” It’s an attempt to return to normalcy, with fields and farmers submerged in stress if waters rise again.

If, and it’s a big if, weather cooperates farmers can plant corn and soybeans at breakneck speeds, according to a recent Farm Journal Pulse poll. We asked farmers how long it takes to plant their crops in perfect conditions and 42% said they could do it in under 10 days. Here’s the breakdown of answers: One to four days: 8% Five to nine days: 34% 10 or more days: 58% These results come in contrast to recent reports that suggest it would take two weeks to plant all of the corn and two weeks to plant all of the soybean acres in the U.S. That report takes into account growers of all sizes includes those with a large number of acres, growers with smaller, slower equipment and your ‘average’ farmer. “I’ve been tracking corn planting progress for the past five years,” says Mark Licht, Iowa State University Extension agronomist. “I use prospective plating to get acres and suitable days and calculate how many acres can be planted per day. For corn, it peaks between 1 and 1.25 million acres per day—that means just over 13 days to get planted.” It’s the same for soybeans—about 14 days to fully planted. Interestingly enough, this number hasn’t changed in more than 30 years. Before rushing into fields, keep agronomics in mind and be willing to be patient for optimal planting conditions. “If you have to wait a day to half a day longer to get in the field versus going in earlier and causing compaction you’re better off,” Licht says. “Planting early could cause more harm than good if you don’t get good root growth, tomahawk roots can decrease yields and can them diminish even more if you get lodging.”

Rushing rivers, disastrous downpours and muddy messes have kept thousands of farmers out of fields. What does this mean for supply and demand? “Supply is still going down, but we don’t know yet how bad it will be, and it’ll take all summer to assess this,” said Bill Biedermann, of AgMarket.net, to U.S. Farm Report Host Tyne Morgan. “Right now, we’re showing 8.66 million acres lost and if Monday doesn’t show a good Crop Progress report we’ll boost that estimate to 11 million acres.” That sharp acreage drop still doesn’t account for acres with drown out and other agronomic issues that could lead to overall yield loss. “This weather event is historic—double the geographic area of the 93’ flood,” he adds. In 1993 experts estimated farmers would only harvest 92% of normal yield but actual harvest numbers dropped to 86% of trend yield.” Even with poor Crop Progress reports recently, the formerly upward-moving corn price saw a drop earlier this week. Is price driving demand down already? Farmers and traders saw evidence of this earlier this week when Smithfield made a large corn purchase from Brazil. “Smithfield bought 500,000 tons of corn from Brazil, so we’re already seeing some of that [demand erosion],” Biedermann said. “At $4.60 demand starts to shift to South America and if we see yield drop from 167 bu. per acre to something like what we saw in 95’ at 158, that’s a $5 corn market.” The traders say farmers need to lock in the profits they can now and consider protecting themselves with options such as puts and calls—just in case they can’t deliver on what they’ve contracted or prices go even higher.

Following an agreement reached between Congress and President Donald Trump to remove border wall funding from the long-stalled disaster bill, the Senate passed the legislation on Thursday, providing more than $4 billion for farmers and ranchers devastated by Mother Nature over the past few years. The bill includes $3.005 billion in farm disaster assistance administered through the Wildfires and Hurricanes Indemnity Program (WHIP). The funds will help producers recoup expenses incurred by losses of trees, bushes, vines, milk and harvested adulterated wine grapes caused by natural disasters in 2018 and 2019. It also includes agricultural losses of peach and blueberry crops in 2017 due to extreme cold and producers impacted by Tropical Storm Cindy. The bill includes $480 million for non-industrial timber restoration, $435 million for rural watershed recovery and $558 million for farmers and ranchers to rehabilitate damaged farmland through the emergency conservation program. Additionally, the bill allocates $150 million for the Rural Development Community Facilities Grant Program, which funds the repair of essential community facilities in rural areas. Despite the long, partisan battle, Puerto Ricans will receive $600 million for nutrition assistance programs.

It comes as no surprise to farmers that planting progress is woefully behind the five-year average again this week. However, with only 30% of the corn planted, this could be the slowest start in recent history – and by a long shot. In their Crop Progress report for the week ending May 12, USDA on Monday noted that the nation’s corn crop is 36 percentage points behind the five-year average planting pace of 66%. At 11% planted, Illinois is 71% behind their five-year average. Not a surprise given the state had less than one day suitable for field work last week, according to USDA. Indiana is also extremely behind at 6% planted compared to the five-year average of 57%. In Ohio, farmers made some progress given the reported 1.5 days of weather suitable for fieldwork, but many fields there are too saturated for planting, so the state’s corn farmers only gained two percentage points to 4% planted compared to their average of 47%. Thanks to a handful of days with fieldwork-worthy weather, South Dakota farmers finally got started and sit at 4% planted. Massive delays in most of the corn growing region begs the question, is this the latest planting ever? Well, given historical data for this kind of thing is hard to come by, it’s hard to say it’s the slowest planting in the history of the world. However, it’s certainly the slowest planting in recent history. The only year that even comes close to it was 1995, and that year the corn crop was 56% planted at this time. When you compare the planting data, the weather forecast, and the fact that May is nearly halfway over, it’s safe to say farmers are likely putting a pencil to prevent plant calculations to see what makes sense. Who knows, a prevented planting payment might be the most profitable option at this point.