Even though the year’s planting season is in its later stages, there are still concerns over the delays that the United States has experienced, and what impact they will have in final corn yield. These fears may be over-exaggerated; though, as planting delays do not necessarily lead to reduced corn yields.
In four of the most recent eight years with planting delays, final corn yield actually topped initial trade estimates. The greatest delays this year are also in regions that either grow very little corn or have a longer growing season.
Another issue the later planting season has caused is uncertainty over planted acreage. It is still unknown what crops may be planted in some regions of the Eastern Corn Belt, especially in Ohio.

It may be a few more weeks before some of these are determined, which trade already believes will give the market inaccurate data in the June 30 planting report. It is quite possible that actual U.S. acres will not be known until later this summer.

The possibility of an early harvest this year is becoming less likely. This is due to the fact the region of the United States that sees the most early harvest activity has had to replant a large volume of their fields from flooding. Other regions that tend to harvest early have seen drought ruin what crops are developing.

This has had more of an impact on the old crop months as buyers extend their coverage, and has supported those contracts more than planting concerns have supported new crop values.

Cash commodity buyers are paying close attention to country grain movement. Historically we see a flush of farm stored grain when the spring planting season starts to wind down, and buyers use this to refill inventory.

The amount of grain that may move this year is being debated; though, as a large number of corn and soybean deliveries have already taken place. This means buyers who have been hesitant to extend coverage may be forced to pay a premium to encourage future sales.

While trade does not seem overly concerned with it, the current balance sheet on new crop soybeans is at a critical stage. If the United States would lose as much as 1 bushel per acre from current yield estimates, it would drop our new crop carryout under 100 million bushels. The same is true if we see any reduction to soybean acres. The reason traders have not shown more interest in this situation is that they believe old crop use is over-stated, and we will see larger new crop carry-in at the end of the marketing year.

News out of China on this year’s grain production may further benefit U.S. soybean exports. China is going to increase their corn plantings, which will in turn increase corn output by 2.4 percent for a crop size of 181.5 million metric tons.

China is also forecasting a 7.9 percent decline in soybean production to just 14 million metric tons; the smallest Chinese soybean crop since 1999. The main reason for the decline in Chinese soybean production is a 6.8 percent decrease in planted acres.

During the past few weeks we have been reminded of how outdated the U.S. infrastructure is, and how it could start to impact global trade. High water levels have prevented timely delivery of grain to Gulf export facilities, and elevated shipping costs as a result.

We have also seen some buyers shift their origination point to the Pacific Northwest on grain purchases, but these terminals are already running near full capacity, and any additional grain flow will be hard to accommodate. These potential shipping delays mean buyers may pass on U.S. grain regardless of price.

Karl Setzer is a commodity trading advisor/market analyst at MaxYield Cooperative®. His commentary and market analysis is available daily on radio, in newsprint and on the Internet at www.MaxYieldCooperative.com
The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.