Best of the Week
Most Popular
1.The Trump Reset, US Empire's Coming Economic, Cyber and Military War With China (2/2) - Nadeem_Walayat
2.Now Is the Time to Buy Gold - 5th Jan 17 - John Grandits
3.CIA Planning Rogue President Donald Trump Assassination? Elites "Manchurian Candidate" Plan B - Nadeem_Walayat
4.The Trump Reset - Regime Change, Russia the Over Hyped Fake News SuperPower (Part1) - Nadeem_Walayat
5.Most Popular Financial Markets Analysis of 2016 - Stock Market Crash Postponed Again - Nadeem_Walayat
6.No UK House Prices Brexit Crash 2016 Despite London Weakness, Forecast 2017 - Nadeem_Walayat
7.President Trump Understands the NSA, CIA... LIE, America's Intelligence Agencies Crime Syndicate! -Nadeem_Walayat
8.President Donald Trump's 2017 New Year Message, BBC Fake News, Was 2016 a Dream? - Nadeem_Walayat
9.Major Stocks Bear Market Still Looms - Zeal_LLC
10.Biased 2017 Forecasts - Debt, Housing and Stock Market (1/2) - James_Quinn
Last 7 days
Gold Price 2017 Trending Towards $1375 as Forecast - 16th Jan 17
'Deep State' CIA Director States We are Not NAZI's, Warns Trump Does Not Understand Russian Threat - 15th Jan 17
UK House Prices Forecast 2017 - Crash or Bull Market? - Video - 15th Jan 17
SPX Stocks Bull Market Update - 14th Jan 17
President Trump vs the Deep State that Hides in Plain Sight - 14th Jan 17
The Impact of Sir Alex Ferguson's Retirement on Man United's Share Price - 14th Jan 17
What Can Stock Market Tell You About Politics? - 13th Jan 17
Big Gold Buying Coming 2017 - 13th Jan 17
A Bullish Case for Gold 2017 - 13th Jan 17
Will Stocks Bull Market Continue to Charge or is it Time to Sell the News - 13th Jan 17
Gold and Silver Off To Shining Start to 2017 - 13th Jan 17
Gold’s Fundamental Outlook for 2017 - 13th Jan 17
Is trading stocks and shares just as luck-based as roulette? - 13th Jan 17
Trump CIA Like Nazi Germany - Fake MI6 Intelligence leaked to Fake News Mainstream Media - 13th Jan 17
USD in Decline. SPX and TNX May Follow - 12th Jan 17
CIA War On Trump - Leaks Fake MI6 Intelligence to Fake News Broadcast Media - 12th Jan 17
Registered Address.co.uk London Business Registered Office Address Mail Forwarding Review - 11th Jan 17
13 Contrarian Economic Predictions For 2017 - 11th Jan 17
10 Potential Black Swans and Opportunities for the US Economy in 2017 - 11th Jan 17
How to Get a Bird of Paradise Plant to Flower - UK Growing Video - 11th Jan 17
The No.1 Energy Stock To Buy Right Now - 10th Jan 17
Frank Holmes: Gold Rally Extremely Likely in January and February - 9th Jan 17
Test Your Markets Trading Knowledge: Find the Clear Wave Pattern on this Chart - 9th Jan 17
Markets 2016 Past is 2017 Prologue - 9th Jan 17
Stock Market Major Indexes Reached New Record Highs - But Will They Continue Higher? - 9th Jan 17
Agri-Stocks and Agri-Food Prices: Both Strong - 9th Jan 17
The Two Hottest Commodities For Investors In 2017 - 9th Jan 17
Gold Price US$700? OR US$7000? - 9th Jan 17
Stock Market Tad More Distribution Needed - 9th Jan 17
In a Lawless World, Rules STILL Matter - 8th Jan 17
The Trump Reset War With China: 2. The Putin Doctrine - 8th Jan 17
China Potentially Threatens a Near Term Us Treasury Bond Market Short Squeeze! - 8th Jan 17
Government Bail-ins, Asset Confiscations and the Gold Sword of Self Defense - 8th Jan 17
Soft Commodities and the SPX Stocks Bull Market - 8th Jan 17

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

What Can Stock Market Tell You About Politics?

U.S. Corn Crop - Too Cold or Wet Yet

Commodities / Agricultural Commodities May 01, 2013 - 04:49 PM GMT

By: Ned_W_Schmidt

Commodities

Let us start by remembering the most important aspect of Agri-Commodities. They are not produced in a factory. Corn, today's example, is produced by placing a seed in dirt with the proper amount of water and nutrients. Of that complete process nothing happens til the seed is planted. If no seeds are planted, no corn. All that happens only once a year.


To plant those corn seeds the soil must have the proper amount of moisture and temperature level. Too much moisture, which is the situation in a good part of the Midwestern U.S. corn belt, prevents the tractors from planting the field. Further, too much moisture creates soil conditions in which the corn plant will not prosper. The soil must also be at a temperature that is conducive to the seed sprouting.

When spring planting season arrives, the USDA's weekly crop progress report becomes important reading. This week the USDA issued the second weekly report on the progress of corn planting. In the above chart the red line is the percentage of the corn acreage that has been planted thus far. In the latest report 5% of corn acreage has been planted.

Black line is the historical average of corn acreage planting. On average 31% of corn acreage has been planted by the date of the latest report. While very early in the planting season, the current planting shortfall, actual versus average, is 84%.

The second chart (right) plots the corn planting shortfall, bars using left axis, versus U.S. corn prices, red line using right axis.

Going into the first report expectations for the U.S. corn crop were very high. Farmers were expected to plant a record number of acres and per acre production was to recover to trend line levels. The first report did not change those expectations as the wet and cold conditions were widely known.

The second report had an impact on prices as it raises questions about the size of the U.S. corn crop. Two reports, even as bad as these two, are not sufficient to overly worry about the U.S. corn crop. However, if the wet and cold conditions continue to impede planting of corn then expectations for the size of the U.S. crop will come down.

Starting with 28 April report, each week with a significant shortfall probably should reduce expectations by about 1%. That might not sound like much, but the U.S. does not have much corn in the bins. Before the combines hit the corn fields in September, the U.S. will only have 21 days of corn consumption in the bins.

As is apparent in the chart, corn prices rose on the latest report. Soybeans prices did likewise. Summer of 2013 has been our forecast for a major bottom in Agri-Grain prices. The problems that seem to be developing in planting the U.S. corn crop, while quite preliminary, support that view.

Tier One Agri-Equities vs S&P 500

Tier one Agri-Equities, pictured in the above chart, have been consolidating for about three months. That consolidation had developed in part due to the strong move of the Agri-Equities over the past year. Expectations of a massive U.S. corn crop also played a role in that consolidation.

Should Agri-Grain prices begin to move higher due to planting issues, the Agri-Equities may move out of that consolidation prematurely. In any event, we expect the consolidation to end by late July. Investors should now be doing their research on Agri-Equities rather than waiting till they move higher. AgriMoney would be a good starting place for that effort.

By Ned W Schmidt CFA, CEBS

AGRI-FOOD THOUGHTS is from Ned W. Schmidt,CFA,CEBS, publisher of The Agri-Food Value View, a monthly exploration of the Agri-Food grand cycle being created by China, India, and Eco-energy. To contract Ned or to learn more, use this link: www.agrifoodvalueview.com.

Copyright © 2012 Ned W. Schmidt - All Rights Reserved

Ned W Schmidt Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife