For the week ending May 2, corn across the U.S. was seen as 46% planted. This was ahead of the five-year pace of 36%. Cold temperatures during the third week of April kept many corn planters out of the fields, awaiting warmer temperatures. With reportedly excellent soil conditions, farmers anxious to do something tried their hand at early planted soybeans. By May 2, 24% of the intended soybean acreage was planted. This was ahead of the five-year average of 13% for this time of year.
The two largest corn-producing states had pushed above the 50% planted mark on May 2:
- Illinois farmers had planted54% of this year’s crop; a 31% jump from the week prior.
- Iowa farmers had planted69% of their intended corn acres by May 2, a whopping 49% jump from the previous week, and well above the five-year average of 24% complete.
With a great start to planting progress, good soil conditions, and recent dry weather, the 2021 corn crop is off to almost an ideal start. Concerns of yield penalties due to late planting should be nearly alleviated at this point.
Data from the University of Illinois (May 2020)* shows that, since 1986, the beginning date for late planting yield penalties on corn in the U.S. was May 20.
- On average since 1980, late planting (May 20and onwards) has accounted for about 18% of the U.S. crop.
- In recent history, the mostextraordinarily high level of late planting occurred in 2019 when nearly 50% of the crop was planted after May 20. In 2019, we saw the highest level of late planting over the last 40 years.
- In only two other years in the last 40 years (1993 and 1995) has late planting exceeded 40%.
As we all know, the planting date is only one piece of the puzzle when it comes to the U.S. national corn yield. Using a regression model, plotting the percent of late planting versus deviation from trendline yield in the corresponding year, the University of Illinois study estimated a 10% increase in late planting decreased national average corn yield by about 2 bushels per acre in the last 40 years. Genetics and technology have made huge improvements over the last 40 years. Nonetheless, this data is interesting. As always, summer weather and timely rains during the growing season will play a major role in determining yield. This study can give us an idea as to how timely planting has historically affected the U.S. national corn yield.
Other May news to note
The CME announced last week that, starting May 3, limits and margins for grains and oil seeds will be increasing. Here are some of the new limits:
- Corn: 40¢ per bu. (currently at 25¢ per bu.)
- Soybeans: $1 per bu. (70¢ per bu.)
- Soymeal: $30 per short ton ($25 per short ton)
- Soy oil: 3.5¢ per lb. (2.5¢ per lb.)
- SRW and HRW wheat futures: 45¢ per bu. (40¢ per bu.)
Limits were also widened for oats, rough rice, lumber futures and other grain contracts.
With the recent increases in volatility and now updated price limits, it looks like these volatile wild markets are here to stay.
Regardless of how much you have planted thus far, it is critical to protect your price position. Front month corn is over $4 higher from its low in April of last year. Front month beans is over $7 higher from their low in April of last year. Expect volatility to continue. Sign up for daily TFM Market Updates and always stay informed on market shifts: https://info.totalfarmmarketing.com/market-updates
*Link to the University of Illinois study
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