29 April 2013 23:09 [Source: ICIS news]
HOUSTON (ICIS)--Slowed by persistent rain and soggy fields, the 2013 corn crop continues to move at a slow but steady pace as the Monday release of the US Department of Agriculture’s Weekly Crop progress report showed that 5% of intended corn crop was planted, a one percentage point increase from last week’s update.
Agricultural analysts were expecting that the progress would likely be around 11%, but with tractors unable to work on the fields, the delays are taking the wind out of the blustery momentum that was once surrounding what many expected was the largest corn crop since 1936. Already this year has seen the slowest pace of corn planting since 1993.
At this same time a year ago, farmers had 49% of the corn crop planted, partially because of favourable weather that was the opposite of the current conditions. The USDA said the average of the past five years of plantings is 31% of the acreage intended being planted.
According to the newest report, key growing states are all in the same situation as Iowa only has 2% planted. Illinois and Indiana are each at 1%, and Nebraska has only seen 3% of its anticipated acreage filled with corn.
Only three states showed significant progress at this time as North Carolina has 78% planted, followed by Texas at 69% and Tennessee with 47%. At least five corn growing states have no planting percentage to report as of Monday’s release.
With weather forecast calling for a continued cool and wet pattern of large sections of the Corn Belt region through the end of the week, the nervousness farmers are feeling and the anxiousness of fertilizer distributors will continue to grow as they keep waiting for spring applications of crop nutrients to commence.
At the same time traders and buyers will view this slow progress as bullish and will continue to keep prices on the upswing. As the crop moves closer to what is considered late planting, rallies would be considered on track because the more days it takes to get the crops in the field, the higher the probability for a diminished yield grows.
There is even the possibility that the record acreage predicted for this spring will dwindle as agriculture producers could choose to avoid the risk of heat-related woes with corn and decide to sow soybeans instead. In terms of fertilizer, there have been some who believe the late factor may see a shift away from ammonia as the key input over to nitrogen solutions that can be applied post-emergence.
This increasing sentiment has added worries to a market that has seen a lack of new demand for crop nutrients and a slow but steady deterioration of pricing for ammonia, which late last week saw May contracts for Tampa settle at $587/tonne CFR.
On Monday, May corn futures closed 40 cents higher to end at $6.84 per bushel, which was followed in the same fashion with the July contract as it marched higher to close up by 40 cents to end the day’s trading session.
The market received a boost before report as market players hurried to secure futures and dump positions that had been based on prices falling as it became clear that the weather has put a tight grip on significant progress within the fields. With the fresh movement upwards, May corn futures has shown the biggest percentage jump since September 2012.
The less-than-optimistic forecast for weather and further delays have put the brakes on the trend, which saw corn futures shrinking after the USDA’s World Agricultural Supply and Demand Estimate report in late March. The government estimated that domestic corn stockpiles were much greater than analysts had expected and that news caused corn futures to fall to a 10-month low.
According to the report, only 2% of the entire corn crop has emerged under the adverse conditions, a fairly steep drop-off from 2012, when 14% of the crop was growing and many farmers were drawing close to completion as they entered the month of May. Typical mid-May is considered the line between being considered late or not.
The USDA said next week’s release will include the first numbers for soybeans, which is expected to be a sizeable crop for 2013 and could end up picking up acres lost for corn. For soybean, futures have joined the rally as the May contract closed 41 cents higher to end at $14.72/bushel on Monday. The July contract also received a boost with the ongoing trading patterns, increasing by 27.75 cents.
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