With 2% of the nations 2008 corn crop planted, concern is building regarding the lag verses a five-year average pace of 7%. Near term weather forecast suggests continued delays may be in order as two more notable weather systems are expected to pass through the major Midwest within the next ten days.
The present planting progress for week 16 of the calendar year may be notably below the five-year average, but is better than 1996's 0% and is identical to 1993's 2%. Allendale needs to note 1993 was the year of the great Midwest floods, which reduced year on year corn production by 33%. In looking at the most recent five year average, from week 16 to week 17, planting progress typically increases by 11%, 16% the next week, a 24% pace increase from week 17 to week 18 and 18% the following week to achieve an average slightly above three quarters complete. Based on the present planting pace and including the average weekly gain, by week 19, the US corn planting pace may reach 71% versus a five-year average of 77%. Allendale suggests, at present it may be a bit premature to push the "planting delays" panic button. However with each new weather forecast of cooler, wetter weather, average growing performance may be in question.
Most recently in 2002 and 2003 the planting pace for week 19 were 62% and 64% respectfully. In 2002, corn yield was 8.2 bushels per acre less than 2001, however 12.2 bushels per acre better in 2003 over 2002. Allendale would regard the slow pace of planting inconclusive to yield potential based on the aforementioned data. What do you think, is it time to be in a panic mode?
Allendale will continue to monitor weather forecast, planting pace and potential impact for spring planted crops and advise hedges and trading accordingly.
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