What Traders are Talking About:
Overnight highlights: As of 5:45 a.m. CT, corn futures are trading 1 to 3 cents lower, soybeans are 4 to 6 cents higher in old-crop contracts and steady to 2 cents lower in new-crop contracts, while wheat futures are mostly 2 to 3 cents higher. Cattle futures are weaker and hog futures are mostly firmer this morning.
* How much of the crop is susceptible to freeze damage? Overnight temps in portions of the Plains dropped low enough to cause some damage to the HRW crop. As of Sunday, USDA said 16% of the Texas crop was headed, while 4% was headed in Oklahoma. That represents about 1.156 million acres of winter wheat and is the crop most at risk. At the heading stage, agronomists say two hours of sub-30-degree temps can cause severe damage. Meanwhile, roughly 12.25 million acres of winter wheat in the Plains were jointing as of Sunday. Agronomists say temps of 24 degrees or colder for two hours will cause moderate to severe damage at this stage of development. If the crop isn't jointing yet, it would take temps of 12 degrees for at least two hours to do slight to moderate damage.
The long and short of it: Overnight temps got low enough to do some damage to a portion of the HRW crop as far south as the Texas Panhandle, especially the crop that is headed. But damage assessment will likely take 10 days to two weeks and post-freeze weather is critical to the crop's ability to recover. Cool, wet conditions would be most favorable from here forward.
* HRW crop ratings drop further. As of Sunday, 34% of the winter wheat crop was rated "good" to "excellent," which is down one percentage point from last week and compares to 36% a year-ago. USDA rates 32% of the crop in "poor" to "very poor" shape, which is a three-percentage-point gain from last week and compares to 31% a year ago. When USDA's weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale with 500 being perfect), the HRW crop dropped 6 points to 293. Kansas accounted for nearly 3 1/2 points of the decline. The SRW CCI rating improved 4 points to 352.
The long and short of it: Ongoing drought and impacts from the harsh winter continue to deteriorate the HRW crop. With sub-freezing temps over portions of the Plains the past two nights, more crop deterioration is expected.
* Corn planting 3% complete. USDA reports as of Sunday that 3% of the nation's corn crop was planted, which compares to 2% last year on this date and 6% on average. Illinois has 1% planted (10% on average), with 9% planted in Missouri (16%) and 1% in Nebraska (1%). Elsewhere across the Midwest, producers have not yet turned a wheel or haven't planted enough corn to register 1%. Given the cold, wet conditions after the rains/snow moved through the region, very little planting progress will be made this week in the Corn Belt. Many producers I've talked to from central Iowa northward don't expect to be able to get rolling on planting until early May -- if soils dry out and warm up.
The long and short of it: Traders aren't overly concerned with the slower-than-normal planting pace at this point. After last year's record-slow planting, it will be tougher to convince them a slow planting pace is any real cause for concern. Of course, much of the reason last year's corn crop turned out to be record-large was because of the extra three to four weeks the crop got on the end of the growing season.
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