Brokers urged against panic over US spring crop sowings
despite wet and cold weather prompting a further shortfall in plantings last
week, with growers now behind by an area the size of Austria.
Farmers had sown 29% of their corn as of Sunday, up 10
points week on week but well behind the average of 42% typical by this time of
year, US Department of Agriculture data showed.
And seedings were behind in all other major spring crops too,
except barley, with only 23% of sugar beet in the ground, compared with an
average of 56%, oats sowings 23 points behind the usual pace, and spring wheat
only 26% planted, behind the typical 41%
The lag in spring crop plantings, compared with area
intentions unveiled in a March 31 USDA report, totals more than 20m acres, an
area twice as big as the Netherlands, or equivalent to the size of the US state
of North Carolina.
'Cool and wet
The delays reflected largely cold and wet weather in
northern states, such as Michigan, where corn sowings were, at 3% complete, 20
points behind the norm as "cold and rainy conditions resulted in minimal fieldwork",
USDA scouts said.
In Minnesota, where "cool and wet conditions continued to
delay spring planting", limiting fieldwork to less than one day last week, corn
plantings were, at 8% complete, 38 points behind average.
Minnesota spring wheat sowings were even further behind, at
4% finished compared with the usual 45%.
In North Dakota, the top spring wheat state, sowings of the
grain were just 5% finished, behind the typical 28%, as "wet, cool conditions
caused delays", with temperatures "6-9 degrees below normal in most areas" and
many farms receiving rainfall of more than one inch.
However, sowing delays were also evident in some of the main
Corn Belt states, such as Indiana, where some areas received 3.5 inches of rain
last week in the south where "farmers were kept out of fields all week long due
to high precipitation".
Indiana corn sowings, at 20% complete, were 14 points behind
the norm, with soybean plantings lagging 11 points at 3% done.
And in Iowa, the top corn and soybean producing states,
farmers had finished 1% of soybean sowings and 23% in corn – lagging the
average pace by 7 points and 27 points respectively.
"Cool weather and persistent wet conditions hindered
fieldwork," limiting fieldwork to 0.9 days last week, scouts said.
planting will be underway'
Nonetheless, analysts urged caution, with farmers still possessing
time in most states to plant crops within the ideal sowing window,
"Trade knows round-the-clock planting will be underway in
many areas" ahead of rains forecast for Thursday.
Ben Bradbury at Benson Quinn Commodities said: "The planting
window for Midwest producers extends into midweek before another round of rain
showers are called for."
And Morgan Stanley said that "improving weather should allow
planting to accelerate this week".
Quoting National Weather Service forecasts, the bank said
that this week should see "temperatures in the 80s Fahrenheit and less than one
inch of total rainfall across the entire Corn Belt" ahead of the weekend.
"Without rain delays, US farmers have the capacity to plant
at least 40% of their corn acreage in a single week and could easily surpass
the normal planting pace of 60% in next Monday's report."
'Should pressure prices'
The reduced likelihood of late plantings "should pressure
new-crop prices", the bank added.
"With the risk of planting delays severe enough to impact
yields declining, we expect the risk premiums in new crop corn and soybean prices
to erode further in the coming weeks."
Chicago corn futures for July indeed fell 0.6% to $5.05 a
bushel as of 05:45 local time (11:45 UK time). New crop December futures were 0.6%
down at $4.97 a bushel
Soybean futures for July were 1.1% lower at $14.47 ¼ a
bushel, and for November at $12.17 ½ a bushel, down 0.8%.
However, new crop spring wheat futures for September held at
$7.80 a bushel, and for December at $8.05 ¼ a bushel, in Minneapolis.