Next week is a big week for corn planting as USDA's prevented planting deadline approaches in many areas, says Jerry Gulke. The trade is resigned that acres won't reach 92.2 million acres, but how close we get is the big question.
By most accounts, planting progress this past week was significant in many areas of the Corn Belt. It just may be too little too late, says Jerry Gulke, president of The Gulke Group.
When Monday’s USDA Crop Progress and Conditions Report, the trade largely expects planting progress to be between 80%-85% complete, Gulke says. In a year when every acre is needed, any loss of acreage is significant, but even losing a small portion of that remaining 15%-20% could have major market impacts, as evidenced by the nearly 80 cent increase for the July contract this week. (Click here for the July '10 corn chart.)
"What I’ll look for is that 15% of 92 million acres is 10-12 million acres. Is 10% of that not going to get planted? What are the odds that all of that will get planted and where is it? If it’s in North Dakota, we’re very near that May 25 date when they can take prevented planting. In the Eastern Corn Belt, will they stay wet into June 5th?"
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Considering the risk involved in today’s crop production with high input prices and volatile markets, the 60%-70% revenue assurance from prevented planting is very attractive to farmers. That may factor into the final soybean acres this year.