The USDA/NASS Crop Progress report issued yesterday afternoon underscored the note that we had put out to clients the previous week. US corn planting is still significantly behind the pace set last year. As of May 1, the 18 major growing states have 13% of the intended crop in the ground, vs. 66% for the same time last year, and the five year average of 40%. This is not to say that corn growers will not make a good crop in 2011, but part of the reason for last year’s strong yields were due to the long season, helped by an early plant scenario.
The April weather summary for average temperature and total precipitation (Y/Y) are shown below in the Weather Trends maps, with the primary corn counties shaded. The pattern does start to look more favorable next week (week of 08 May), so we are expecting planting progress to pick up by mid May.
In addition to the weather impact to US corn, this pattern also will affect wheat crops for both the US and Canada. With tight stocks, the weather premium in grains futures can add significantly to the volatility over the next month.