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RSS By: Joe Victor, AgWeb.com

Joe Victor is a Business Development Specialist with Minneapolis Grain Exchange, Inc., where he monitors cash grain activity and cash grain opportunities. He provides marketing advice through this blog.

Corn Planting

May 14, 2009
Corn Planting:
 
Allendale Inc is well aware of the latest corn planting progress report suggesting 48% of the 2009 corn acres are planted vs a year earlier progress of 48% and a five year average of 71%. At first blush this year’s progress may appear as less than alarming when compared to year earlier levels and aware the 2008 corn yield at 153.9 bushels per acre was the second largest dating back to 1999.
            However the nation’s second largest corn producing state of Illinois is entering a cross roads period of the planting season as it continues well below its recent historical pace. At no time dating back to 1999 has the states pace of planting been as far behind as it presently struggles with.
            As you are able to view via the chart, Illinois pace of planting at 10% (May 10th) is more than a third off its weakest campaign of 2002 and 59% below the state average dating back to 1999. At 10% planted it compares to the 1993 Midwest flood year of 4%. Neighboring Indiana, typically the Midwest’s fifth largest corn producing state is a meager 11% planted and finding it difficult to put two consecutive days of planting in a weeks worth of time. Rains this week, mid and late are likely to continue delays and frustration.
            How long could it take to “catch-up” to projected targeted 2009 planted acres for Illinois and Indiana? The answer is there may not be enough time on the calendar. Estimating Illinois has 10.98 million acres remaining to be planted and Indiana has slightly more than 5 million acres, it will likely take Illinois more than four and a half weeks and Indiana slightly more than two weeks, IF it stops raining. 
          Allendale Inc finds it extremely interesting the USDA has already reduced yield potential for 2009 corn production as a result of the slow planting pace but did not adjust projected planted acres. Allendale Inc suggest both yield and acres need to be reduced in the month of June WASDE. By reducing trend yield potential for 2009 via the May WASDE, the futures market reaction was one of surprise to see projected end stocks of 1.145 billion bushels, 28.5% lower than 2008/09 end stocks. What if USDA has a repeat performance up its sleeve of its actions one year ago and ignores the 48% planting progress, increases acres planted as they did in the June 2008 Planted acres report by 1.3 million (five year average increase has been 1.74% increase), reduce yield from 153.9 to 148.9 from May to June WASDE, and then again from June to July WASDE by another .5 bu/acre. Then the major surprise of a yield increase from July to Aug of 6.6 bpa then retrace by 2.7 bpa into the Sept WASDE. It was not until the October 2008 WASDE when USDA decided to reduce planted acres to 85.9 million vs its earlier forecast. Needless to say, some very interesting adjustments through the heart of the 2008 summer growing season.
            USDA is presently estimating yield of 155.4 bpa on 85 million acres and suggest 1.145 billion bu of end stocks. If USDA were to use a similar yield reduction from the May to June WASDE as it did a year earlier, look for end stocks to shrink by 35% to a level of 752 million bushel.
            What are your thoughts regarding the pace of planting? Are you switching full season corn varieties to a shorter season? Are you preparing to switch from corn acres to soybeans or does the gross per acre still favor a fight for corn acres? Do you have your 2009 marketing plan in place, with room for price action adjustment? Contact an Allendale representative for a marketing plan comparison utilizing risk management alternatives.
 
If you should have questions, please contact an Allendale representative 800 551 4626……Joe Victor
 
The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Commodity trading may not be suitable for recipients of this publication. This is not a solicitation of the purchase or sale of any commodities. Those acting on this information are responsible for their own actions. Any republication, or other use of this information and thoughts expressed herein without the written permission of Allendale, Inc., is strictly prohibited. Allendale Inc. c2009
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COMMENTS (2 Comments)

Anonymous
In N C Il. Iam about 1week away from planting anything.There is no corn planted in my area. with more rain on the way for Fri.-Sat. there will be alot of acres switched to beans or not planted at all if it doesn't stop raining for at least a two week period. 05-15-2009
9:55 PM May 14th
 
Anonymous
Not switching to beans as we have been lucky here in SE iowa to have all of our corn planted. If I had not sprayed the bean acres with a pre-plant and it wasn't so wet here I'd plant more corn on corn. Looks like alot of corn on corn here (nothing new) but there is some corn still to be planted on the usually very good ground SE of us. Not alot of beans planted here as just too wet and cold under the corn stubble. I have only planted 25% of our beans right before it rained again. One good side effect of all the rain is that it has given us more time to get alot of tile jobs done this spring. Good luck and we know how you guys feel in Illinois. Last year was the worst floods we'd ever seen in this area.
1:41 PM May 14th
 
 
 
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