May 3, 2001

Market Advisor: Corn Outlook Affected by Plantings, Weather and Exports

by George Flaskerud, Crops Economist
NDSU Extension Service

Reduced acres, some planting delays and adverse weather could lead to preharvest marketing opportunities for corn. Unfortunately, the pace of corn exports could partially offset any weather or plantings impact.

Watch your marketing plan price objectives and time deadlines for selling. An objective of $2.55 December futures on May 23 are the next numbers in my example marketing plan for corn. You can find the plan at http://www.ag.ndsu.nodak.edu/aginfo/cropmkt/cropmkt.htm . The contract reached $2.62 on Dec. 29. The contract closed at $2.26 on April 30, up from a contract low of $2.19 on April 27.

Implications from delayed plantings are minimal as of April 29. Seventeen percent fewer acres of corn than a year ago had been planted although there was no difference from the five-year average. Planting progress was 28 percent so far this year versus 45 percent a year ago and the five-year average of 28 percent. USDA’s Crop Progress Reports can be found at http://www.usda.gov/nass/pubs/staterpt.htm .

If the weather should delay plantings relative to the five-year average, corn yields could be impacted. Robert Wisner, Iowa State University extension economist, shows the impact of delayed plantings at http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/ . The U.S. corn yield averaged 11.5 percent less than the trend in corn yields in the five wet years since 1973. He also points out that the capability for rapid planting and cooperative weather can overcome a late start.

Any potential for reduced yields is particularly significant considering that USDA’s March 30 Planting Intentions Report indicated that corn acres would be down about 4 percent from a year ago (down 12 percent in North Dakota). The reduction was about 1 million acres more than expected by the trade. The 76.693 million acres expected would be the lowest level since 1995. In addition, Wisner indicates that there is a tendency for actual corn plantings to be less than intended. Corn plantings could be 0.6 million acres less than intended based on 1990-00 data.

The impact of reduced and delayed planting, however, may be somewhat offset by the pace of exports. That data can be found at http://www.fas.usda.gov/export-sales/weekpi.htm . Total commitment as a percent of total exports stood at 69 percent as of April 19 versus 80 percent a year ago and 85 percent for the five-year average. Outstanding sales do not offer encouragement as they also lag the level of a year ago and the five-year average by a considerable amount.

USDA reduced export projections for the current marketing year in their April Supply and Demand Report. A further reduction may be projected, which may not be offset by other use. The reduction in April was offset by an increase in feed use.

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Source: George Flaskerud, (701) 231-7377, gflasker@ndsuext.nodak.edu
Editor: Tom Jirik, (701) 231-9629, tjirik@ndsuext.nodak.edu