FORT COLLINS, Colo. (Reuters) - After last year’s planting troubles and especially with the recent low-price environment, agriculture analysts may be overly eager to scrutinize this year’s U.S. corn campaign, and imperfect field conditions across the Corn Belt could be a good place for them to start.
Historically, how the U.S. planting season begins can impact both corn acres and yield, even with less extreme anomalies. But serious concerns over wet fields or chilly temperatures would not be warranted until next month, which is when more substantial shifts in acres or yield become more likely.
Last year’s corn planting was record late due to excessively wet spring weather, but the futures market did not show signs of panic until mid-May.
Market participants have already begun painting lower corn acreage scenarios following the U.S. Department of Agriculture’s survey result of 97 million acres, published last week. That would be the largest area since 2012, which may be difficult to imagine with such low corn prices.
However, history suggests that weather, not prices, has produced major changes in corn acres from planting intentions. But it also may be unwise to rule out anything in 2020, which has already featured some unprecedented activity, like the virus-fueled plunge in ethanol prices and its immediate destruction of U.S. corn demand.
USDA’s statistics service will publish national corn planting progress for the first time this year on Monday, though progress reports are already available for some of the minor producing Southern states.
Those early results are mixed, with some states like Louisiana, Texas and Alabama ahead of the recent average as of Sunday. Things are a little slower elsewhere, and an eight-state weighted average suggests planting pace is about 3 percentage points below normal. Those eight states account for about 10% of national production.
Last spring was notorious for excessive moisture across the entire Corn Belt, but this year has also been wet. According to precipitation data, last month was the wettest March for the U.S. Midwest since 1977. However, March 2020 was significantly warmer than normal, while March 2019 was much cooler.
Current soil moisture is above average basically everywhere that corn is grown in the United States, but the anomalies are a bit less severe than a year ago, on the wider scale. There are some differences by state, though.
In Illinois, the No. 2 corn state, soil moisture during March was up 12% from the recent average and down just 3% from last year, which was at least a 30-year high. March 2020 was the third-wettest for Illinois soils behind 1993.
Soil moisture in top state Iowa is in better shape, up 14% from average but down 13% from last March, which was also the wettest in more than 30 years. Another good sign for Iowa is that soils in March 2016 were wetter than last month, and 2016 was the last year that Iowa got a fast start to planting.
However, the next couple weeks may not provide a lot of drying opportunities as below-normal temperatures are expected across most of the country. Those temperatures could be up to 15 degrees Fahrenheit below average in the Corn Belt. Midwestern farmers are unlikely to plant in the colder weather even if their fields are fit, so if the cold spell is as strong as predicted, planting may not begin until the end of the month.
Luckily, soil temperatures were adequate for the time of year in both Iowa and Illinois as of the weekend. Extremely cold soil temperatures in Iowa delayed planting two years ago, but the delays were nowhere near as bad as last year.
On average over the last 30 years, corn planting is 15% complete by April 23 and 31% finished by April 30. Progress usually passes the halfway mark on May 7, and the crop is two-thirds planted by May 13. The 80% mark is reached on May 20, and only 10% of the corn is planted after May 28.
When comparing corn planting pace with acreage changes from March intentions, campaigns that got off to the quickest start usually featured an increase in acres.
If planting starts late, even by a week or two, corn acres are always more likely to fall from intentions than rise, but the chances of that increase more rapidly by mid-May. Years where corn planting progress was below 50% on May 15 had a one-in-six chance of featuring an acreage boost from March.
It must be noted that within the past 30 years, U.S. farmers were more often too optimistic in March than not, as there were 14 instances where final corn plantings were 0.5% or more lower than in March. There were only six cases of acres rising by at least 0.5%.
It is also important to point out that although final corn acres are more likely to be below intentions if planting starts late, that decline may not show up in the June acreage survey. Corn acres more often rise than fall between March and June.
Taking this analysis a step further, there is a relationship between the change in planted corn acres from March to final and the national yield. Smaller acreage reductions over that period have more mixed yield results, but the bigger losses in acres were also associated with some of the worst yields.
On the other hand, when final corn acres are larger than March intentions, yields are almost always at or above the long-term trend, the only exception being 2012. The best yielding years within the past few decades have also coincided with an acreage gain.
The opinions expressed here are those of the author, a market analyst for Reuters.
Editing by Matthew Lewis