A wide-open week with dry weather allowed farmers to make big strides in planting progress. USDA’s latest Crop Progress report shows as of Sunday, May 2, 46% of the corn crop had been planted, a 29 percentage point jump in just a week. It also tops the five-year average of 36%.
The progress beat the trade’s expectation to hit 38% to 40% compared with the 17% progress posted last week.
According to Allendale, the weekly planting progress gain is the sixth best on record. The jump in planting progress topped the Crop Progress report released during the same time last year. The report released May 4, 2020, showed farmers made a 24 percentage point increase in planting progress in just one week, passing the halfway point at 51% complete.
46% corn planted as of Sunday implies a 29% gain last week. That is the sixth best for the last week of April. We now have reason to add 0.5% to 2.0% to trend yields (until summer weather). On the other hand, how the market balances this with the Brazil story is another question. pic.twitter.com/9g51Pmy4HG
— Rich Nelson (@RichNelsonMkts) May 3, 2021
State by state, USDA shows as of Sunday, 60% of Michigan’s corn crop is in the ground, nearly double the average planting pace. Kentucky farmers had 61% of the corn crop planted, 16 points ahead of average.
USDA also showed farmers have 24% of the soybean crop planted, which is a 13-point increase from the previous week. In Iowa, 43% of the soybean crop is planted, which compares to the five-year average of 14% for this time of year.
While planting progress was significant in some areas, it’s a mixed bag for farmers grappling with dry conditions. Some farmers in areas such as northwest Iowa are waiting on rain to plant, while some farmers in states such as Illinois are already finished planting. But does planting progress even matter to the markets? Some analysts argue it doesn’t this year.
“I’m not sure it makes a difference,” says Peter Meyer of S&P Global Platts. “I mean, certainly it’s going to be cause for pause for people who understand what’s going on here. But let’s be honest, this market is being fueled by algorithms that are just trading momentum, which is also being fueled by the fact the funds were smart enough to realize that when trillions of dollars come into an economy, inflation will be the ultimate result. So, I’m not necessarily sure that it’s going to have an impact like it would in a regular year.”
Meyer says with current commodity prices, there’s an even bigger urgency to get the crop in the ground this year.
