Weather could switch corn acres to soybeans

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Moving into the second half of May the crop planting outlook becomes increasingly tenuous. USDA’s latest Crop Progress Report shows that as of May 16, 63 percent of the corn and 22 percent of the soybean crop is in the ground. That compares to the five-year average of 75 percent for corn and 31 percent for soybeans. Making comparisons to last year isn’t accurate, because of the unusually warm spring and the tremendous early planting progress it allowed.

In contrast, this year’s cool, wet spring across the U.S. Corn Belt, as well as in significant parts of Canada’s grain-producing areas, has been discouraging. Iowa, the corn Mecca, made excellent progress last week, getting 92 percent of its crop planted, but just north in Minnesota planting stalled at 47 percent (the five-year average is 81 percent.)

States hit particularly hard are Indiana and Ohio, where planting progress has been minimal. As of May 16, Ohio had only 7 percent of the corn crop planted compared to a five-year average that’s 10 times that level. It’s a bit better in Indiana where 29 percent of corn seed is in the ground.

Most of the U.S. mid-section has been dry this week, but spotty rain showers return to the weather map yet this week and into the weekend. Northern states also encountered frost which some crop analysts say could require replanting.

North Dakota farmers had reported significant plans to increase their corn acreage in USDA’s Planting Intention’s Report, but those plans may have to shift. In Monday’s Crop Progress Report, North Dakota (only 14 percent planted) and Wisconsin (35 percent) were the only two states out of 18 reporting no signs of emerging corn. Nationally, corn emergence was reported at 21 percent, which is 18 percentage points below the five-year average.

For some U.S. corn growers, as well as in Canada, there’s increasing talk about switching to soybeans. “May 24 is a corn-planting cutoff date,” an Ontario producer reported during a marketing conference call.  “Yields start to decline significantly and you have to start to wonder if it’s worth planting corn.” Certainly, June 1 is the time to switch to soybeans for just about everyone.

Last week, USDA predicted a national average corn yield of 158.7 bushels per acre. Assuming the targeted 92.2 million acres hold, that would produce a record 13.5 billion bushels. But, that may now be wishful thinking. USDA will provide its complete yearly look at 2011 planted acreage at the end of June.

The later that corn is planted, the more vulnerable it is to extreme heat during the critical pollination period this summer, which in turn can impact the national average yield. But with rising demand and extremely tight carryover supplies, there’s no room for error. “This has been far from a perfect growing season,” notes Michelle Lamirande, commodity research analyst with Farms.com Risk Management.

Switching to short-season corn would cut yields as well, but generally that’s not recommended until near June 1.  

“Weather remains the key factor for corn (and soybean) price movement, but it’s still early and we will get a lot more acres planted before the prevent plant days happen,” Lamirande says. “We will have to wait to see how many acres are shifted from corn to soybeans as this wet weather forces planting to be delayed.”

As of the start of this week, she doesn’t believe that the weather impact has been factored into the markets. Looking ahead, she advises farmers to keep an eye on weather developments, flooding and issues in the Middle-East due to oil’s influence on corn. 


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