March 16, 2016
Spring Planting May Start Earlier Than Normal in Midwest
In most of the Midwest, the spring weather looks promising for a quick start to spring planting. There is very little no snow cover to melt, the soils are not frozen very deep and they are generally not saturated, and early reports from farmers already in the field indicate that the soil is working up very good. Barring a big change in the overall weather pattern, I think this all indicates a quick start this spring with planting starting maybe 1-2 weeks earlier than normal.
A quick start to planting has a physiological impact on the market. If the corn gets planted earlier than normal, the market is going to assume that there may be more corn acres planted than originally anticipated and that the corn yields will be very good given normal weather this summer. That attitude will persist as long as the weather is conducive for a quick early start for the crop.
The market will be worried though that a warm and dry start to planting might be a precursor to a warm and dry summer as well. If that does turn out to be the case, then the optimistic start to the growing season could turn pessimistic very quickly. If such a change in attitude does occur, it would probably happen in late May or early June. For now, let's take a look at what an early spring might mean for acreage and yields.
Corn Acreage - If we do have an early and warm spring in the Midwest, farmers could well plant more corn than what had been indicated in the Outlook Meeting several weeks ago. In that meeting, the USDA had indicated that U.S. farmers might plant 90 million acres of corn this spring. I would now view that number as the floor for the 2016 U.S. corn acreage. If everything goes right this spring, U.S. farmers might plant as much as 92 million acres of corn if not more. But before we make an official estimate of the U.S. corn acreage, let's wait to see what the Prospective Planting Report indicates on March 31st.
Most of the potential for additional corn acreage would probably come at the expense of soybeans.
Less Prevent Plant Acreage - For the last two growing seasons, the U.S. has experienced 5-6 million acres of prevent plant, or acres that did not get planted by a specific date due to excessively wet conditions. For many of those acres, farmers initiated a claim with their crop insurance company for compensation for their lost production. Currently, it certainly looks like there will be less prevent plant acreage this spring compared to the last two years. If that does turn out to be the case, there may be as much as 2 million additional acres that could be planted to summer crops.
Wet Weather in the South Could Reduce Acreage - While the Midwest looks to be on track for early planting, the situation is just the opposite in the Delta and mid-South. Record rainfall and severe flooding is widespread across Louisiana, Mississippi, Arkansas, as well as other areas. No doubt, the flooding will eliminate the possibility of planting some of the intended corn acreage in the region. Some of the soft red winter wheat acreage might also be lost due to the flooding. I think all this could point to some additional soybean acreage in the region, but it is too early to estimate how many acres might eventually be impacted.
Early Start Indicates Good Corn Yields - A lot of things could point to a high initial corn yield estimate in the U.S. such as: early planting, good germination and stand establishment, high plant populations due to a lack of saturated conditions, less disease pressures due to the dryer and warmer conditions, and earlier than normal pollination. If all those things do occur, then the initial corn yield would have to be in the range of 165 to 170 bu/ac.
In order to achieve such a good corn yield, a lot of things would need to fall in place this summer such as: a lack of heavy spring flooding rains, no later than average frost, and normal summer weather without any extended periods of hot and dry weather.
Soybean Acreage - I think the 2015 U.S. soybean acreage is still undetermined. Soybeans could lose acreage in the Midwest if farmers opt for additional corn. On the other hand, soybeans could gain acreage in the Delta and the mid-South due to the flooding and saturated conditions. The excessive wetness could eliminate some of the intended corn acreage as well as some of the existing soft red winter wheat acreage. If that turns out to be the case, I think the majority of those acres would end up being planted to soybeans.
As far as soybean yields are concerned, there is very little correlation between a quick start to spring planting and soybean yields. Soybean yields are determined by the weather in July and August almost regardless of when the crop was planted.