Rain, hail, tornadoes, mudslides slow US corn, wheat sowings

11.04.2017

Rain, hail and tornadoes slowed early US corn and spring wheat sowings more than investors had expected – with more rainfall expected – although the moisture revived the dryness-plagued hard red winter wheat crop.

The US Department of Agriculture, in its first assessment of US corn sowings progress, as the seedings window opens in the Midwest, pegged it at 3% complete as of Sunday.

The figure, while in line with the average pace, was below the figure of 4-5% that investors had expected.

And it reflected widespread slowdowns, with only one state reported, Texas, showing ahead-of-average progress, and Tennessee growers behind the pace by as much as 9%.

'Tornado touchdowns'

USDA officials attributed the lag to rains which, in Missouri were reported continuing "to delay planting of corn throughout the region", while scouts in Illinois, the second-ranked US corn-producing state, said that "rain throughout much of the state delayed corn planting".

In Kentucky, growers faced particularly severe conditions, with USDA reporting that "wet and windy weather delayed fieldwork, with limited corn planting this week.

"A severe storm on Wednesday produced large hail, strong winds, and tornado touchdowns throughout central Kentucky, damaging fields and structures."

'Unstable conditions… Mudslides'

For spring wheat, grown largely further north in the US, the USDA, in its first estimate for sowings progress this year, pegged plantings at 5% complete – well behind the average figure of 11% by now, and the 12% that investors had expected.

Corn sowings progress for selected states, and (difference from average pace)

Texas: 59%, (+9 points)

North Carolina: 17%, (-7 points)

Tennessee: 16%, (-9 points)

Missouri: 12%, (-7 points)

Kentucky: 9%, (-5 points)

Kansas: 8%, (-4 points)

Sources: USDA, Agrimoney.com

Again, the slow start was attributed to wet weather, with scouts in Montana flagging some reports that "fields are too wet to begin planting".

In Washington "fields remain soaked" thanks to poor weather blamed by livestock farmers for calf deaths, while in Idaho "there were several reports of standing water in field," with the north and west of the state "primarily too wet for fieldwork.

"Saturated soils created unstable conditions. The far north had some mudslides," USDA scouts added.

"Just a few fields, largely on higher ground, were able to be cultivated."

Rain debate

And forecasters foresee further rain for many parts of the US, with Tobin Gorey at Commonwealth Bank of Australia, saying that "forecasters are flagging frequent rains in the US Midwest which are likely to slow planting over the coming fortnight.

Spring wheat sowings progress for selected states, and (difference from average pace)

Washington: 11%, (-38 points)

Idaho: 35%, (-16 points)

South Dakota: 25%, (-2 points)

Minnesota: 9%, (-7 points)

Montana: 8%, (-6 points)

North Dakota: 5%, (-3 points)

Sources: USDA, Agrimoney.com

"Those delays won't become an actual 'problem' unless they start to stretch into May," but could prompt investors to inject some risk premium into prices earlier.

"The market is unlikely to wait that long to react.  Investors remain heavily short so, if the rain continues to evolve as is forecast, we may see more short term rallies occur as they look to exit those trades."

Benson Quinn Commodities said that "it does look like average to above average precipitation can be expected for much of the corn belt in the next couple of weeks.

"The current forecast indicates that corn planting progress may be limited in the near term."

However, the broker added that it had "a tough time believing rains in April aren't ok", with plenty of time yet for sowings, and moisture set to help crops get off to a strong start".

Winter wheat improvement

Where the rains have been unquestionably seen as a benefit is by wheat farmers in the southern Plains, where hard red winter wheat crops have struggled against dryness.

Winter wheat ratings for selected states and (week-on-week change)

Ohio: 82%, (+2 points)

Illinois: 72%, (+7 points)

Kansas: 48%, (+5 points)

Oklahoma: 45%, (+4 points)

Colorado: 42%, (+3 points)

Texas: 41%, (+2 points)

Data show % of crop rated "good" or "excellent". Sources: USDA, Agrimoney

The proportion of winter wheat rated "good" or "excellent" rose by 2 points to 53% last week, edging near the year-before figure of 56% which preceded a bumper US harvest.

In Kansas, the top wheat producing state, where scouts said that "rain continued to fall across the majority of counties, with many averaging one inch or more", the crop rating rose by 5 points to 58%.

In Oklahoma, the rating increased by 4% week on week to 45% good or excellent, although USDA scouts retained some caution about growing conditions.

"Although spring storms brought some rainfall to the south eastern and east central districts [of Oklahoma], drought conditions continued to advance across the state last week."


agrimoney

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