The shocker in last week’s USDA Planting Progress Report was that Ohio was last on the list for planting. It should encourage us that this week farmers in northeast Ohio made record progress in the six days most of them had to get work done.
Proving that a good farmer maybe only needs to sleep every other day, some reported getting as much as three-quarters of their crops planted in that six days.
Rain Friday afternoon stopped progress in my area, but the amounts were varied. Rain was light enough near my house that one 24-row planter was starting again at dark on Monday night. We had more rain in the night and this Tuesday morning, so I don’t know how far he got.
Many farmers not so fortunate
Sadly, anecdotal reports from other parts of Ohio show them wetter than we were, so Ohio as a whole probably did not catch up as much as we in northeast Ohio did. Talking on our Russell Consulting conference call this morning was educational, and negative. Large areas of the Midwest still have very little planting done. Where it is good, it is very good, but where it is bad, it is awful.
Those farmers with the crop planted are now talking about the slow progress of corn, particularly. One reporter said corn that should be 18 inches high is 5 inches. Many talked about saturated fields, and fields with drowned spots that would not recover.
Two weeks ago USDA reported an expected corn crop of 15 billion bushels. This would have been a record, but it was immediately discounted as analysts noted that the report made no allowance for slow crop progress that was already evident. Now, two weeks later, we know that the crop is record late. The result will be dramatically reduced yields and significant reduction in actual planted acres.
Grain market reaction to delayed planting
The futures market has reacted strongly to this change in the expected corn crop. December corn futures have rallied from the May 13 low at 3.63 3/4 to the 4.30 high posted this morning. That is more than 66 cents gain in two weeks.
To say that we are in a bullish market is to understate the obvious. If the crop is reduced by 2 or 3 billion bushels, which is now possible, our current price is still vastly underdone. Of course, the question always is, how high can we go? I don’t know, but we won’t find out this week.
Our market was delayed a day by the Memorial Day holiday. Also delayed was the weekly Crop Progress report, which is normally out by Monday. It reports the crop progress through Sunday night. We will now get that report later today.
I expect it to show that the U.S. is still record late in corn and soybean planting. I expect it to show that Ohio has caught up much of its late status, but that we are still maybe 55% instead of something closer to 75 or 80 that is normal.
Next week in this space I will be able to give you real numbers. Regardless, as you read this the month of May is over, and only corn that is vastly yield-reduced will be planted. The focus next week will be switching to soybeans.
Normally we would be expecting delayed corn acres to go into beans, but this year the emphasis will be just on getting the intended beans planted. In much of the country that has bean planting progress right along with corn, the beans have been neglected to plant corn. I don’t expect much increase in soybeans, as farmers will be struggling to catch up the beans, too.
It should be noted that the 2020 crop corn is not following the current crop. The excitement is current. This morning so far we have December ‘19 futures up seven and a quarter cents, but Dec. ‘20 only up one and a quarter. At some time we will have an opportunity to sell the 2020 crop, but that will not come for a while.
We can expect that farmers will overplant 2020 corn acres in response to the 2019 crop problems and prices, but next year’s best prices will likely come during the current rally of the 2019 crop.
November soybeans have now gained 41 cents off the corn rally. That was helped by a 14-cent gain so far Tuesday, and a high that was up 21 cents at one point.
The corn planting is so bad that the market is starting to discount the idea of increased acres, but this is still a corn rally.
