Corn Planting Pace Slightly Slower Than Expected

April 24, 2012 04:03 AM

What Traders are Talking About:

* Corn planting pace slightly slower than expected. As of Sunday, USDA reported 28% of the U.S. corn crop was seeded, which was was slightly less than expected. At 28% complete, the corn seeding pace is now the third fastest for this date after being record-quick earlier. Cool, wet conditions have slowed corn seeding efforts in western and northern areas of the Corn Belt the past two weeks, while producers in the eastern Belt continue to make strong progress. Based on forecasts for the remainder of this week and next week, planting efforts will continue to be somewhat slowed in the western Belt. Meanwhile, soybean planting is record fast for this time of year at 6% complete.

The long and short of it: The corn planting pace is far from a concern, but it has backed off enough, especially in the western Belt, to ease talk that corn plantings will top USDA's March intentions of 95.9 million acres.

* Chinese corn buys confirmed?. USDA reported a daily corn sale of 480,000 MT for 2011-12 to an unknown destination this morning. This business in believed to be to China as it matches up closely with recent talk China bought 500,000 MT to 1 million MT of U.S. corn.

The long and short of it: Since the China demand talk is already "in" the market, this could trigger a "sell-the-fact" reaction, although supportive outside markets and talk China may be in the market for more U.S. corn make that unlikely.

* El Neutral into summer. The Australian Bureau of Meteorology says climate indicators across the tropical Pacific Ocean are neutral and will remain that way until at least early summer. The bureau says some, but not all, climate models note an increased chance of El Nino conditions developing this summer or fall.

The long and short of it: La Nina conditions typically persist for around 30 days after ENSO conditions turn neutral. But if there's a quick shift to El Nino conditions, it would suggest favorable Corn Belt weather conditions this summer.

* Record canola acres expected in Canada. As of March 31, Canadian producers plan to plant a record 20.372 million acres to canola, according to Statistics Canada's survey work. That's well within the guess range of 19.4 million to 23 million acres. All wheat acres are expected at 24.324 million (22.3 million to 27.2 million acre guess range) and barley seedings are expected at 7.968 million acres (7.5 million to 8.8 million acre guess range).

The long and short of it: Canadian contacts suggest planting intentions have already likely shifted some since the survey work was completed. Historically, Canadian producers plant more acres than initially intended. And that's expected to be the case this year as up to 12 million acres of summerfallow from last year will be seeded.

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