Implications of Corn and Soybean Planting Progress

Implications of Corn and Soybean Planting Progress
Darrel Good, Agricultural Economist - University of Illinois

Each Monday afternoon during the growing season USDA releases the Planting Progress report. Todd Gleason files this report on how it is assessed by the trade; and how really it is summer weather that make the difference, not the pace of planting.

Each spring the corn and soybean markets react…
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Each spring the corn and soybean markets react to the pace of planting, reflecting expectations that an unusually fast or slow pace of planting may impact acreage decisions and/or yields. The rains this spring, first in the Delta, now in the Plains, and forecasts for a stormier pattern in the Midwest have triggered the annual discussion of the production implications for corn and soybean planting progress.

The definition of what constitutes early or late planting varies by geographic region and has likely changed over time writes University of Illinois Agricultural Economist Darrel Good on the FarmDocDaily website. It makes it hard to characterize planting progress on a national basis.

Still, the economist at ILLINOIS have done some work in this area arguing that for the period from 1986 forward, planting in the major producing states that occurs after May 20 for corn and after May 30 for soybeans should be considered late in terms of the potential impact on national average yields. Here’s what Darrel Good says that shows.

Good :39 …difficult to form expectations for this year.

Quote Summary - It is not yet known whether a relatively large or small percentage of the 2016 corn and soybean crops will be planted late. Producers still have more than a month to plant corn and six weeks to plant soybeans before planting would be considered late by our definition. Observations since 1986 suggest that there is a tendency for corn acreage to exceed intentions in years when a small percentage of the crop is planted late and for acreage to fall short of intentions when a large percentage of the crop is planted late. However, the large variation in the direction and magnitude of acreage deviations from intentions makes it difficult to form expectations for 2016.

Deviations in planted acreage of soybeans from intentions have shown no clear pattern based on the lateness of planting writes Good in the FarmDocDaily article. He says there has also been a tendency for the national average corn and soybean yields to fall below trend value in years when a large percentage of the crop was planted late.

Good :11 …the yield impact of summer weather.

Quote Summary - The variation in the direction and magnitude of deviation, however, is an indication that the effect of planting date on yield is dominated by the yield impact of summer weather.

Darrel Good thinks commodity market traders, then, should be more focused on growing season weather prospects rather than on planting progress. Still the reports, released each Monday afternoon at 4pm eastern time by USDA NASS, provide a guide post by which the trade makes decisions.