4/23/13 - Last week we wrote about the very same topic - late planting and disappearing drought - but essentially that is the same story this week as well. We have a very late and disappointing start to the planting season, which is supporting prices and leading to a potentially disastrous start to corn planting and HRS wheat planting. But it also is slowly shrinking the drought lingering effects from last year such that the drought has very little impact now beyond the HRW wheat area, particularly the western HRW wheat area.
Planting progress was anemic in the weekly crop progress report yesterday, with corn only 4% planted vs. 16% normally, cotton 10% planted vs. 14% normally, sorghum 25% planted vs. 24% normally, sugarbeets 16% planted vs. 34% normally, and rice 33% planted vs. 44% normally. Oats were only 41% planted vs. 59% normally, HRS wheat only 7% planted vs. 24% normally, and barley 23% planted vs. 24% normally. The northern plains have not even begun planting yet, with snow still covering most fields.
Winter wheat conditions declined to 35% G/E, with the Pro Ag yield model declining a healthy .23 bu/acre due to freeze damage last week in winter wheat country. Our yield model stands now at only 45.52 bu/acre, down .23 bu/acre from last week's 45.75 bu and well below 'trend' at 47.27 bu/acre. So winter wheat did go backwards fairly aggressively last week.
The markets are battling between what is a disaster planting season thus far, and the improving weather forecasts in the 8-14 day forecast (warmer and drier) that should allow some planting progress in early May. It is still too wet and cold for much of any planting to be done in the coming week. So that will leave us even further behind in progress next week from what is 'average', especially for corn and HRS wheat. Much of the country is still under the impact of a very cold streak of weather, a trend which has been in place since early March. This cold and wet streak has melted away the drought in the western corn belt and northern plains such that there is very little lingering effects of drought left in even the western corn belt. However, it also has led to virtually no planting of the corn and HRS wheat crop yet this year.
It also has led to damage the past week to the HRW wheat crop, with the Pro Ag yield model dropping for all winter wheat nearly a quarter of a bushel this past week - a fairly aggressive decline. This means that the crop is in decline now vs. the steady conditions it has been showing since last fall when it froze up under the impacts of the 2012 drought. Now, the drought has shrunk but the cold weather has damaged winter wheat especially over the past week. There are reports of stinking, rotting wheat plants in fields from northern Texas to Kan., and the damage is impacting the yield model even this week. It's likely we will see another decline in the yield model next week, as typically it takes time for freeze damage to show up. If not for the extreme cold the past few weeks, winter wheat conditions probably would have seen an increase in yield potential, as recent rains have been beneficial to the crop. They also have shrunk the impact of drought on the 2013 crop, as recent moisture has been beneficial to the crop and improved soil moisture conditions.
This week, prices have been on the retreat as the extended forecast has improved from the bitter cold that we've been suffering through. However, with late planting and the damage to winter wheat crops, it is uncertain if we can keep prices down given the new concerns of this spring. Yes, our worries from last fall and early winter of drought and its lingering effects on the crop probably need to be erased for 2013 crop prospects. But new problems have become the focus, namely late planting of corn/HRS wheat and the damage from cold weather on the winter wheat crop.