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Just how long could corn farmers continue to plant corn in 2007? As recently as 2006 NASS released its final corn planting progress report on May 28th, June 1st of 2003 and June 9th of 2002. Remember, the Dec new crop corn futures price may be a very strong incentive to do everything possible other than sump pump the ponds in the field to plant corn in 2007. In addition to the new crop corn futures price incentive is crop insurance which may even with less yield in 2007, guarantee payment better than 2006, once again based on a much more attractive Dec 2007 futures vs yr earlier levels.
53% Spells Relief: last Monday's 23% corn planting pace spelled trouble and suggested the lag could remove 450,000 acres from USDA's March 30th Prospective Planting estimate of 90.45 million acres. Provided today's planting progress of 53% planted as of May 6th, our most recent estimate suggest no change to the prospects of planting the 90.45 million acres of corn.
The trade is focused first on weather forecast, then planting progress and finally Friday's USDA crop production-WASDE report. First question, what is the likelihood USDA will adjust acres from its March 30th prospective planting report of 90.45 million? Not likely at all. Dating back to 2001 in USDA's May WASDE, they have not changed its acreage estimate. Given today's planting progress which is 10% less than its five year ave, and most recent 6-10 day NWS forecast, Allendale suggest USDA is not likely to change its May 11th initial look at 2007 acres vs what they used in its March 30th prospective planting report. Second question, could USDA adjust its yield in the May 11th crop production report vs what they estimated from its Feb annual outlook conference of 152.8 bu per acre? In looking at the most recent 5 crop years, the three most recent came in with an upward revision low of 1.3 to a high of 2.8 bu per acre. In all three years, planting progress was ahead of its five year ave in front of the May crop production release. In 2002 yield was unchanged and the corn planting pace of 45% compared to a five yr ave of 58%. Even with plantings lagging by 14%, USDA found no reason to lower yield potential. In 2003 yield was also left unchanged at 139.7 bpa. In front of the May crop production report, corn planting pace was 58% vs a five yr ave of 53%. Allendale estimates USDA is not likely to adjust corn yield from the 152.8 bu per acre used in its Feb Annual Outlook report. In conclusion, it may be unlikely for USDA to deviate from its acreage and yield estimate. The positive news for futures is with this years lag in planting pace we do not anticipate USDA will be able to increase yield potential.
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