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April Showers (and Snow) Bring Market Chaos

May 4, 2013
By: Sara Schafer, Farm Journal Media Business and Crops Editor
4 11 13 ice planter
A late-season snow has kept planters parked in several areas of the Corn Belt.   

This year’s planting season has been slow and spotty. Jerry Gulke explains the market impact and what’s ahead in Friday’s USDA reports.

The 2013 planting season has been downright wacky. The calendar has flipped to May, but snow, freeze warnings and excessive rain broke weather records in many areas.

These rare weather occurrences kept many planters parked across the country. As of April 28, USDA estimates only 5% of the U.S. corn crop is planted. The five-year average for this time is 31%. Last year, nearly half of the corn crop had been planted.

Jerry Gulke, farmer and president of the Gulke Group, was able to get some of his corn planted earlier this week, as parts of Illinois enjoyed back-to-back 80-degree days.

"With the weather we’ve had recently, I think I’ll be done planting by May 10, like normal," he says.

Yet, he knows, many farmers haven’t been able to get in the field at all, which is understandable. For some farmers, it looked ridiculous to plant, Gulke says, for others it was right on time.

He believes that as the major weather system that delivered multiple inches of snow to parts of Kansas, Missouri and Iowa, dies out, farmers will have a good opportunity to hit the fields next week.

"The snow is gone in North Dakota, and they are supposed to see 70 degrees this week," he says. "We have clients in Indiana and Ohio who started running today."

The good news, Gulke says, is farmers have known for a month now that planting would be delayed and rushed when the window opened. "So, they are rested up and will likely run 24 hours a day," he says. "There will be a lot done next week."

Market traders have been extremely focused on planting progress. Following Monday’s Crop Progress reports, the corn market saw limit gains.

For the coming week, USDA will not only release its weekly planting progress report, on Friday, May 10 it will release this month’s monthly World Agricultural Supply and Demand Estimates and Crop Production reports.

Gulke says USDA has a history of lowering yield expectations if the corn crop is not 40% planted by their May reports.

Currently USDA’s national corn yield estimate is 163.6 bu. per acre. "I wouldn’t be surprised to see them drop it a bushel or a bushel and a half. But, it is really too early."

He also thinks it is too early to say with any certainty farmers will change their crop mix. "Nobody has done any concrete changes yet," he says.

What he will be watching closely is old-crop corn demand. Will USDA reduce exports more or increase feed usage? "What I would look for is if they don’t raise feed usage, it kind of tells us that we’ll import corn, feed more wheat or do something else to not tighten up that feed supply more than it already is," Gulke says.

 

Hear Gulke's full audio analysis:

 

Have a question for Jerry? Contact him at 815-721-4705 or jerry@gulkegroup.com.

 

For More Information
See current market prices in AgWeb's Market Center

Have you started planting? When will you hit the fields? Submit your report to AgWeb Crop Comments!
 


 

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COMMENTS (5 Comments)

TrueFarmer - ND
Steven -- exactly right. We've been coached for years now to keep the market oversupplied. For years it was higher yields and lower prices.

Appreciate your response Jerry. Nice to see that you take time to read the comments. Beings this is just an online debate please don't take my comments too personal - I appreciate that you farm and I do enjoy listening to your market reports.

I do farm over 4000 acres and I need a minimum of 20 good days to get it in. I grow very little corn. Wheat yields have already taken a big hit with winter wheat weather and now late spring wheat planting. I would just like to hear some analysts mention that. Farmer don't want to hear that we can miraculously go 24 hours a day and get the crop in. You don't go 24 hours at night with massive sloughs in your fields - besides you can't go in many places period; soil temps are far too low.
American farmers have struggled through $2.00 corn and $3 wheat for years and I'm not about to stand up and cheer that we are finally getting reasonable prices for our crops the last 6-7 years; after years of hoping you could break even. That's childish - no other industry in the world purposely runs down it's own markets like ag/farmers. Input costs keep going up and up; did we forget so soon just how bad it was??
Corporate farms paying $13000 an acre is not reality; $2000 an acre for land that produces 30 bushels of wheat is not reality in upper MW either. Reality will hit again and then we can roll our own cigarettes (like my grandpa did) with the fake money old Ben printed.
6:53 PM May 6th
 
TrueFarmer - ND
Steven -- exactly right. We've been coached for years now to keep the market oversupplied. For years it was higher yields and lower prices.

Appreciate your response Jerry. Nice to see that you take time to read the comments. Beings this is just an online debate please don't take my comments too personal - I appreciate that you farm and I do enjoy listening to your market reports.

I do farm over 4000 acres and I need a minimum of 20 good days to get it in. I grow very little corn. Wheat yields have already taken a big hit with winter wheat weather and now late spring wheat planting. I would just like to hear some analysts mention that. Farmer don't want to hear that we can miraculously go 24 hours a day and get the crop in. You don't go 24 hours at night with massive sloughs in your fields - besides you can't go in many places period; soil temps are far too low.
American farmers have struggled through $2.00 corn and $3 wheat for years and I'm not about to stand up and cheer that we are finally getting reasonable prices for our crops the last 6-7 years; after years of hoping you could break even. That's childish - no other industry in the world purposely runs down it's own markets like ag/farmers. Input costs keep going up and up; did we forget so soon just how bad it was??
Corporate farms paying $13000 an acre is not reality; $2000 an acre for land that produces 30 bushels of wheat is not reality in upper MW either. Reality will hit again and then we can roll our own cigarettes (like my grandpa did) with the fake money old Ben printed.
6:53 PM May 6th
 
Jerry Gulke - Chicago, IL
My regrets to the synical TrueFarmer in ND--- hope your snow is gone---as it appears to be ---and he will get started in the field on Monday--- sorry about corn prices--perhaps another rain system will come to prop things up and he will feel better
9:50 PM May 5th
 
Steven - Kingsley, IA
Wow That is going to be some rest to be able to run 24 hours a day for 10 days straight. But,I'd do anything to keep the corn market oversupplied.
10:05 AM May 5th
 
TrueFarmer - ND
Mr Gulke farms enough land to get his crop in in less then 10 days!! So what?? Where is the urgency and truth in this article? The truth is that the northern plains still has frozen ground!! And the snow is not gone in much of the Midwest and northern Midwest. Once it is - it will take days of hot dry weather to dry it out. We are already into late May in much of the northern Midwest now. If you farm 2000 - 10000 acres like many farms do - how are you going to get it all in??
And if you do - what kind of yield is already lost!!?? Come on Jerry - if you are a farmer then you know there are some very serious issues here. Why are you trying to keep the market depressed. Always stating that the crop will miraculously all get in and that farmers will go 24 HOURS!! Wow really?? And Jerry is a farmer?? Why would a farmer run his own markets down with such talk??!
The United States now has a 60 day food supply instead of the historical 90 day supply. We are one disastrous crop year away from serious trouble and this is the type of analysis we get from a FARMER??
I'm a real farmer - a TrueFarmer - and all of us real farmers know better then this nonsense....

4:25 PM May 4th
 



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