Brokers urge calm, despite heavy US sowing delays
By - Published 06/05/2014

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% by now.

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 conditions'

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.

'Persistent wet conditions'

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.

'Round-the-clock 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 a bushel, and for November at $12.17 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 a bushel, in Minneapolis.

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