(Agrimoney) – Ideas of a near-perfect start for this year’s US corn crop took lost some polish when rains were shown holding back the condition improvement that investors had expected, slowing soybean plantings too.
The proportion of US corn rated “good” or “excellent” held at 74%, week on week, as of Sunday, US Department of Agriculture data overnight showed.
The rating, while historically a strong figure, was short of the 1-point improvement that investors had expected, besides being below the year-ago rating of 76%.
However, it tallied with ideas among many observers that the market was being a little optimistic on crop ratings, given the excessive rains seen in many areas last week.
“The trade was reported as expecting an improvement but the chat on social media was talking about the poor crop conditions due to the heavy rain and cold weather,” said Paul Georgy at Chicago-based broker Allendale.
Replanting talk
In Missouri, a mid-ranking US corn-producing state, the proportion of crop rated in good or excellent health fell by 9 points week on week to 53%.
Last week in the state, “precipitation averaged 2.46 inches state-wide, 1.44 inches above normal,” USDA scouts said.
In Kentucky, where the rating fell by 4 points, albeit to a strong 81%, “there are reports of corn yellowing, uneven stands and replanting due to weather issues”.
Reseeding was noted in some other states too, including in Kansas where “there were concerns that some corn may need to be replanted where flooding occurred”, and where the corn condition rating fell by 2 points to 50% last week.
Sowings hold-ups
Furthermore, sowings of the last corn crops slowed to a crawl in these states too, with just 2% of corn seeded in both Kansas and Missouri.
And for soybeans, the dent to planting progress was even more severe in these states, with Kansas farmers having seeded 21% of their crop as of Sunday, up just 1 point week on week and 42 points behind the average pace.
“Cool temperatures and widespread rainfall delayed planting progress another week,” USDA scouts said.
In Missouri, growers got 3% of the soybeans seeded, taking completion to 23%, 34 points behind the average, and helping limit to 71% the national planting progress figure.
“Soybean planting is behind trade expectations of 75%,” if a little above the average of 70%, Allendale’s Paul Georgy said.
‘Substantial problems’
At Global Commodity Analytics, Mike Zuzolo said that “it’s clear that the 27 of 30 days of rainfall in the month of May for the state of Kansas, and likely the same for Missouri, created substantial problems getting row crops in the ground”.
And he said that research for other states was suggesting more crop problems than many in the market had suggested.
“Client conversations from Illinois to Ohio suggest the same thing in terms of much more yellow-coloured, nitrogen-deficient corn this spring versus the past four years.”
Nitrogen fertilizers can be particularly prone to leaching from the soil in heavy rains.
‘Seller on the defensive’
Such talk warranted a less bearish take on prices, Mr Zuzolo added.
“On corn, I think the seller is likely to be on the defensive, unless the dollar marches through its May high,” making dollar-denominated exports less competitive, he said.
At Chicago-based broker RJ O’Brien, Richard Feltes said that the USDA data were “collectively slightly supportive [for prices], with soy planting below expectations and corn condition unchanged versus last week”.
Corn futures for July stood 2.5 cents higher at $3.54 ¾ a bushel in early deals in Chicago, while soybeans for July rose 7.75 cents to $9.33 ¾ a bushel.
