Evening Report (VIP) -- April 30, 2013

April 30, 2013 09:28 AM
 

CONSULTANT PEGS U.S. CORN YIELD 155-156 BU. PER ACRE... Crop consultant Dr. Michael Cordonnier say barring extended planting delays in May, a likely U.S. corn yield is in the range of 155 bu. to 156 bu. per acre. He says after heavy April rains, drought concerns have been pushed west of the Missouri River.

"In broad terms, if corn planting is delayed until May 15-20, the yield declines 0.5 bu. per day for each day planting is delayed. That increases to 1.0 bu. per day for each day planting is delayed from May 20-25. It increases to 1.5 bu. per day if planting is delayed until May 25-30 and 2.0 bu. per day if planting is delayed until early June," notes Dr. Cordonnier. "Having said that, we also must remember that there is not a hard and fast relationship between date of planting and eventual yields."

Following are Dr. Cordonnier's "three potential scenarios" for 2013 U.S. corn production:

Average scenario: This assumes planted corn acreage declines 2 million acres to 95.3 million (mostly in northwest Corn Belt); 92% of the corn acreage is harvested for grain or 87.6 million acres harvested; the average nationwide corn yield is 155.5 bu. per acre. This would result in total production of 13.63 billion bushels.

Optimistic scenario: This assumes corn acreage declines only 1 million acres to 96.3 million; 92% of the corn acreage is harvested for grain or 88.6 million acres; the average nationwide corn yield is 160 bu. per acre. This would result in total production of 14.17 billion bushels.

Pessimistic scenario: This assumes corn acreage declines by 3 million acres to 94.3 million (due to extended planting delays); 92% of the corn acreage is harvested for grain or 86.7 million; the average nationwide corn yield is 150 bu. per acre. This would result in total production of 13.01 billion bushels.

Dr. Cordonnier says there's "maybe a 20% possibility" the national average corn yield could fall below 150 bu. per acre or top 160 bu. per acre. For an average yield above 160 bu. per acre, he says a combination of the following would likely need to occur:

  • No more significant delays during May in getting the majority of the corn planted in the central Corn Belt.
  • Flooding in eastern North Dakota and western Minnesota ends in early May, allowing enough time to plant corn before the end of May.
  • A gradual warm up to near normal summer temperatures. A sudden warm up could turn "mud into bricks," which would impede crop establishment.
  • A cooler-than-normal summer with no prolonged periods of extreme heat especially during pollination and early grain filling.
  • Cool nighttime temperatures that would inhibit dark respiration, which is the yield-robbing condition that occurs when nighttime temps remain elevated.
  • A warm and dry early fall with a later-than-normal first frost.

For a national average yield below 150 bu. per acre, he says a combination of the following would likely need to occur:

  • Continued delays in planting the corn in the central Corn Belt such that a significant portion of the crop is seeded during the last third of May -- or later.
  • Rapid snow melt resulting in severe flooding along the Red River in eastern North Dakota and western Minnesota, which would delay planting until late May or early June.
  • Switching from a wet April/May to a hotter and drier weather pattern in June, which could result in restricted root growth, poor crop stands and an early onset of moisture stress.
  • Hot and dry weather during pollination.
  • Prolonged periods of hot and dry weather in July and August accompanied by warmer-than-normal nighttime temperatures. The high daytime temps could result in moisture stress and the high nighttime temps could lead to increase dark respiration.
  • An earlier-than-normal frost and quick end to the growing season.

 

 

AGRONOMIST: STILL TIME TO GET CORN PLANTED... Corn planting advanced by just one percentage point last week to 5%, which compares to 49% last year and the five-year average of 31%. With more rain in the near-term forecast, producers are growing increasingly concerned about the potential for yield declines due to the likelihood a larger-than-usual percentage of the crop will be planted after the ideal planting window closes.

University of Illinois crop sciences professor Emerson Nafziger says if weather conditions improve, there's still time to get the corn crop planted and crop potential back on track. He reminds of the importance of not planting into wet, compacted soils, which leads to yields being compromised. Click here for more.

 

 

APRIL RAINFALL MAP PAINTS PICTURE OF PLANTING DELAYS... Meteorologist Gail Martell of MartellCropProjections.com says the heaviest rainfall in April occurred in the southern two-thirds of the Corn Belt. A large portion of the Belt saw rains two to three times the normal amount. Click here to view the 30-day precip map.

 

 

IMPROVEMENT IN RESTAURANT INDEX GOOD NEWS FOR MEAT DEMAND... The National Restaurant Association's Restaurant Performance Index (RPI) improved 0.7 points from the previous month to stand at 100.6 in March. March represented the second time in the last three months the RPI stood above 100, which signifies expansion in the index of key industry indicators. Improvement in the RPI is potentially good news for meat demand. Click here for more.

 

 

CROP INSURANCE PAYOUTS PASS $17.1 BILLION FOR 2012 CROPS... U.S. crop insurance indemnities for 2012 crops hit $17.169 billion as of April 29, pushing the loss ratio for the program to 1.55, according to Risk Management Agency (RMA) data. This is the first time since 2002 that the loss ratio has been over 1.0; in 2002, it was at 1.39. But the total net acreage insured in the program for 2012 crops at 282.402 million is well above the level seen for 2002 crops of 214.865 million. Already for 2013 crops, there are 87.146 million net acres insured, ahead of the 84.869 million for 2012 crops that were insured at this point last year. Corn remains the major crop for payouts at $11.676 billion, accounting for 68% of total indemnities and nearly $1 billion above the total payouts for 2011 crops of $10.862 billion.

The pace of the increase has clearly slowed now that the Group Risk Income Protection (GRIP) payouts have flowed into the system and should not grow a considerable amount more from here if history is any guide. For 2011 crops at this point last year, indemnities rose just $127 million to the current total of $10.861 billion. Get more details.

 

 

SENATORS: USTR SHOULD INVESTIGATE ANTI-DUMPING DECISION BY EU... A bipartisan group of 14 senators have signed a letter sent to the Acting U.S. Trade Representative (USTR) Demetrios Manatos and Acting Secretary of Commerce Rebecca Blank, calling on them to review and consider a World Trade Organization (WTO) challenge to the European Union's controversial and unprecedented anti-dumping duty recently imposed on U.S. ethanol producers.

The letter notes that the European Commission (EC) "is taking this unprecedented action, despite the Commission's failure to make any particular finding of dumping by an producer or marketer investigated in connection with the case. We believe this rule sets dangerous precedent for trade and trade remedies in advance of the well-publicized start of important trade talks between the United States and the European Union, and will dramatically and unilaterally change the boundaries and limits of international anti-dumping law." Learn more.

 

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