By Rick Jordahl
With excessive rainfall, wet fields and more rain in the forecast, the 2011/2012 corn crop has experienced a worrisome start. Many are wondering what effect the delay in corn plantings will have on this year’s yield.
Much of the corn that was planted in the last couple of weeks was likely seven to ten days behind the ideal planting schedule. For that corn, yields might not be significantly impacted. However, the outlook for corn that hasn’t yet been planted, or planted in just the past few days, the outlook may not be as optimistic.
“For corn that is still to be planted, or was in the last few days, yield is more likely to be impacted,” according to Darrell Mark, University of Nebraska Extension livestock marketing specialist. According to the National Agricultural Statistics Service report released May 23, 79 percent of corn acres have been planted, compared with the five-year average of 87 percent. This is an increase of 16 percent from last week’s report.
USDA’s May World Agricultural Supply and Demand Estimate report is already reducing the projected corn yield. The report projects 2011 national yield at 158.7 bushels per acre - or around 2-3 bushels lower than trendline. Growers in some states, however, are making up for lost time.
“A lot of corn was planted very fast,” says Mark. “What I think will be quite interesting to see is how many additional acres Iowa and Nebraska got planted. Planting conditions in Iowa and Nebraska were pretty good, and considering the slow national planting progress, some growers in these states may have switched acres they were intending to plant to beans into corn.”
Some market watchers suggest that growers really intended to plant 94+ million acres, and they didn't all show up in the March 31 report, according to Mark. “So, even if we lose acres due to flooding, they think we would still have 92 million acres planted to corn. I tend to favor the idea that producers in Nebraska and Iowa added more acres than they originally planned and that the 92 million acres in the March report was accurate at the time. This increase in corn acreage will partially offset delays and potential acreage losses in Ohio, Indiana and North Dakota and on down the Mississippi River.”
Mark says that the market has not yet factored in the potential yield reduction due to this spring’s flooding. “It is possible that the market started recognizing that this past week, but I doubt it is fully factored into price yet. With such incredibly tight supply/demand balance sheets, 100,000 acres or 200,000 acres is a big deal.”
The corn acreage question also extends to soybeans. “In addition to the typical soybean market factors, there is a tremendous amount of uncertainty about planted soybean acreage this year due to corn acreage uncertainty,” says Mark. “These acres that aren't yet planted to corn may be switched to soybeans, a decision that may not come until after Memorial Day. I believe the soybean market has been bracing itself for this possibility.”
In addition to the usual supply and demand factors, corn prices are being influenced by other external influences, according to Mark. “It seems that the last couple of weeks we've seen the corn market have volatile trade that isn't clearly supported by supply/demand fundamentals.”
Mark cites the value of U.S. dollar, the energy market, particularly crude oil, and investment fund interest as examples of outside factors that are influencing corn prices. “It suggests that speculative funds are moving in and out of the market in large numbers.”