Hopes for a bumper US grain harvest, to help replenish tightened world supplies, took another knock as data revealed a continued slow pace of corn sowings, and a deterioration in the winter wheat crop to amongst its worst on record.
US farmers had seeded 7% of their corn as of Sunday, the slowest pace of plantings since 2013, US Department of Agriculture data overnight showed.
That represented less than half the 15% typically sown by now, with growers behind the usual pace in all but four of the top 18 growing states, hampered by cold and wet Midwest weather.
“Continued below-average temperatures and wet fields limited farmers to just 0.3 days suitable for fieldwork” last week, said USDA officials in Minnesota, the fourth-ranked corn producing state.
In top grower Iowa, “rain, high winds, and cold conditions continued to stall spring planting”, officials said, with the USDA’s bureau in Indiana saying that “high moisture levels and cool soil temperatures continued to delay planting”, which had made a “slow start”.
Poor crop
For winter wheat, the USDA reported a further 3-point decline to 27% in the proportion of the US crop rated “good” or “excellent” as of Sunday – the lowest reading for that date on readily available statistics going back to 1995.
In fact, the rating has rarely sunk below 30% good or excellent at any time of year, the last being a 29% figure reported in mid-May 2014.
The record low, on the available dataset, was a 26% figure seen in late April 1996.
The latest reading – which fell below the expectation of any of the investors in a Reuters poll, who had expected a 28-34% figure – reflected largely dryness in the key central Plains growing area.
‘Nearly every kind of weather imaginable’
This included Kansas, the top wheat-producing state, where the crop rating tumbled by 7 points to 26% good or excellent, as fields continued to dry up, with 69% of topsoil and 68% of subsoil reported “short” or “very short” of moisture.
In neighbouring Oklahoma, facing similar dryness, the proportion of winter wheat reported as good or excellent fell by 5 points to 16%, with declines further north in Nebraska and South Dakota too.
Meanwhile, the rains in the Midwest undermined some soft winter wheat crops, with the reading in Illinois down 5 points week on week to 40%.
In Michigan, where the rating dropped by 5 points to 38%, USDA officials reported that last week “saw nearly every kind of weather imaginable, with snow falling in many areas at the beginning of the week, followed by rain and cool drizzle until the weekend”.
Market reaction
On futures markets, soft red winter wheat futures, the world benchmark, rose by 2.2% to $10.96 a bushel for July delivery in early deals on Tuesday.
Hard red winter wheat for July stood up 1.8% at $11.74 a bushel.
Hard red winter wheat “crops are nearing a point where forecasts will be downgraded”, said Tobin Gorey, director of agricultural strategy at the Commonwealth Bank of Australia.
“Weekend rainfall, forecast and realised, was not enough to make a difference to the outlook for troubled crops.
“The USDA’s crop conditions report again shows that crops in the problem region are in poor condition.”
Chicago corn futures for July stood up 0.5% at $8.01 ¾ a bushel.