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April 2009 Archive for Chip's Chore Time

RSS By: Chip Flory, Pro Farmer

Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm. In fact... I don't even have horse chores to do any more!

Dust is flying in NE Iowa!

Apr 24, 2009
Chip Flory

 

Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm, but taking care of two horses in the morning before I head in for work gives me a little time to think about the day ahead. Each morning, stop at this spot to get a feeling for the "tone of the day" - and some attitude about agriculture and the markets.

I was thinking…

... about all the dust flying around the Pro Farmer home base!

Wow! On my 17-mile drive home yesterday, I counted 14 guys planting corn. The air had the sweet smell of "earth" and the dust was flying. It was the first "all-out" day in northeast Iowa that I've noticed. And there's a good reason for it... after taking a shot at setting some new record high temps today, rain is supposed to move into the area tomorrow, stick around all day on Sunday and maybe even carryover into Monday. So, starting yesterday, the race is on. Growers remember last year all too well and they know a slight shift in the pattern could send the Illinois-Indiana pattern further west, shutting us down for a while.

A buddy of mine from over in western Iowa summed up the last couple of days very simply: "We put a pile of corn in the ground!" In his immediate area, he thinks corn planting will be close to 50% done before rain stops progress on Saturday.

Another buddy of mine from central Illinois summed up his situation very simply: "We haven't turned a wheel." In his immediate area, he thinks corn planting will be close to 0% done before rains move back in this weekend.

I got some "jeers" for my concern over the lack of planting progress I talked about earlier this week in Chore Time... they just said it's "too early" to be too concerned about the lack of planting progress. Generally, I agree. But, it's not just the date that has me concerned. It's also the lack of fieldwork that's been done, the lack of nitrogen application, current soil conditions and the weather forecast. When all those things are taken into account and not just the planting pace and the date on the calendar, it's already late. Can we catch up? Only if the weather forecast is wrong -- which I wouldn't rule out!

Anyway... we're talking about a lot of "cool" stuff in Pro Farmer newsletter this week. Pro Farmer news editor Roger Bernard was in Washington D.C. earlier this week and he'll share what he learned, along with providing some perspective on California's new biofuel, greenhouse-gas emmission-reduction plan. We're also talking planting progress, discuss the chance of continued strength in the boxed beef market, some improvement in chances to export beef to S. Korea, the really poor finish to the Argentine soybean crop and the government-induced challenges farmers there face in the year ahead, the condition of the winter wheat crop here in the U.S. and we highlight the latest economic outlook from LaSalle Economics president Dr. Vince Malanga. And that's what's covered on just 3 of the 8 pages!

Pro Farmer Sr. Market Analyst Brian Grete filled another 4 pages with fundamental and technical analysis of the corn, soybean, wheat, cotton, cattle and hog markets, along with a look at interest rates, Federal Reserve action and explains our current risk management plan for all the markets we cover.

I haven't written the front page of the newsletter yet, which is what I'm going to start right now! For e-mail subscribers, the newsletter will be in your mailbox at about 1:00 CT this afternoon... for everybody else we'll get the printed version of Pro Farmer in the mail this afternoon. If you'd like to know more about Pro Farmer services, drop me a note, or give Shelley a call at 1-800-772-0023.

Traders ignoring risks to corn crop

Apr 22, 2009
Chip Flory

 

Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm, but taking care of two horses in the morning before I head in for work gives me a little time to think about the day ahead. Each morning, stop at this spot to get a feeling for the "tone of the day" - and some attitude about agriculture and the markets.

I was thinking…

... about the start of another strange growing season.

It really is a story of the "haves" and "have-nots" when it comes to good weather to stick some seed in the ground already this year. East of the Mississippi River, soils are wet... way too wet. Some areas were close to "go time" last Saturday, but (of course) it rained again. As of April 19, Illinois had just 1% of the corn crop planted -- which is way behind the five-year average planting pace of 23% done by that time. Indiana didn't have any of the corn crop planted, behind the five-year average of 9% done.

West of the Mississippi River, some significant progress has been made -- probably even much more than indicated by Monday's Crop Progress Report. It showed Iowa had 6% of the corn crop planted, behind the five-year average of 10%. Nebraska had 3% of the crop planted, behind the five-year average pace of 6%. However... I'm hearing some Iowa growers have plowed forward at a faster-than-normal planting pace. Some 1,000-acre-plus corn growers around Ft. Dodge (north-central Iowa) are even reportedly about to finish up planting corn. A little further south in central Iowa, some growers will be planting beans by this weekend.

In northeast Iowa, corn planters are kicking up dust -- from the guys that have decided to get started. Many growers in the area haven't started yet because they simply don't feel the urgency to get started. Soil conditions are nearly perfect for planting, but are still a little cool. A Bremer Co., Iowa, corn grower even told me, "You know... we could sure use a half-inch of rain."

I'm sure growers in Illinois and Indiana that read that comment are saying to themselves, "Be careful what you ask for!"

So, what will next Monday's Crop Progress Report look like? West of the Mississippi, planting progress will very likely be back close to the five-year average. On April 27, 2008, Iowa had a five-year average planting pace of 33%. That included a 12% completion pace on April 27, 2007 -- but (obviously) did not include the 3% that was planted on April 27, 2008. So, the five-year average planting pace for Iowa will be less than 33%. Here's what Iowa's planting progress in the last five years look like:

April 25, 2004: 36% planted
April 23, 2005: 15% planted (April 30, 2005: 49% planted)
April 23, 2006: 26% planted (April 30, 2006: 63% planted)
April 27, 2007: 12% planted
April 27, 2008: 3% planted

Using the progress from April 23 in 2005 and 2006, the five-year average planting pace would be 18.4%.
Using the progress from April 30 in 2005 and 2006, the five-year average planting pace would be 32.6%.

When the dates don't line up exactly, USDA "massages" the data to line up the dates. With Monday's Crop Progress Report being "as of April 26," the above progress points will be adjusted to "as of April 26" in each of those years. With that in mind, look for the five-year average planting pace in Iowa as of April 26 to be about 26% to 28%.

With Iowa's corn planting progress at 6% as of April 19, the progress that's been reported to our office certainly suggests Iowa will be back on the five-year average planting pace. That, however, will not be true east of the Mississippi. Growers there are sitting and waiting for the ground to "get fit" to plant. Illinois, Indiana and Ohio will be way behind the five-year average planting pace in Monday's update.

What will be the market reaction? Pro Farmer Sr. Market Analyst Brian Grete said it best in last week's Pro Farmer newsletter. "Simply," said Brian, "traders remember what happened last year." Slow plantings, terrible growing conditions and the crop still managed a 153.9 national average yield.

But, as much as they remember what happened early last year, Brian says traders are also choosing to ignore -- consciously or subconsciously -- that the 2008 corn crop was blessed with an extra two or three weeks of excellent growing conditions at the end of the growing season. Obviously, there's no guarantee the sure-to-be-late-planted eastern Corn Belt corn crop will get the "right conditions" later this year to offset the growing season the crop is missing out on right now.

So, for now... traders will assume the crop will get planted. They'll assume the crop will make up for the time it's missing right now. They'll continue to base day-to-day trading decisions on what's happening with the U.S. dollar, crude oil and the stock market -- and they'll continue to ignore the risks to the corn crop. For now...

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