Corn Weekly Export Inspections Remain Well

Corn weekly export inspections remain well below the pace needed to reach the USDA projection of 1.95 billion bushels for the year ending on August 31, 2011. Inspections need to average 42.9 million bushels per week to reach that projection. For the 5 weeks ended April 28, weekly inspections averaged 38 million bushels.

The weekly estimates of domestic ethanol production have also been erratic. Based on weekly estimates through April 22, it appears that total ethanol production in March and the first three weeks of April was nearly 6 percent larger than in the same period last year. This compares to the 4 percent increase that is needed from March through August for corn used for ethanol and by-product production to reach the USDA projection of 5 billion bushels.

Little is known about the rate of domestic corn feeding. Declining hog and cattle prices raise some concern about feed demand. However, the feedlot inventory of cattle on April 1, 2011 was 5 percent larger than the inventory of a year earlier. In addition, the rapid switch to wheat feeding that was being discussed a few weeks ago has likely been put on hold as wheat prices have increased relative to corn prices. The June 1 Grain Stocks report, to be released on June 30, will reveal the rate of feed and residual use of corn during the third quarter of the marketing year.

The most discussed item last week was the delay in corn planting and expectations about planting progress over the next two weeks. For much of the corn belt, optimal corn planting dates are believed to be in late April into very early May. Research reveals that corn yields tend to decline as planting moves beyond the optimum window. The declines also tend to accelerate as planting gets later and later. The declines in yield, however, are relative to potential yield. Yield can still be relatively high with late planted corn if the growing season weather is very favorable, but late planted corn would still be expected to have yields below that of corn planted in a timely fashion.

Some corn is planted late every year. For 2011, the questions center on what portion of the crop will be planted late and the degree of lateness. It now appears that areas in the western corn belt will make substantial planting progress in early May. The focus will be on the wet areas in the southern and eastern corn belt and the cool areas of the northern belt.

Most of the intended corn crop will likely get planted, so the most important factor will become summer weather. In 2009, extremely favorable summer weather extended the growing season and more than compensated for planting delays. An examination of weather records, however, reveal that the uniformly favorable conditions of 2009 have been rare.

Uncertainty about consumption and production prospects, along with volatile currency and energy prices, suggest a continued wide trading range for both corn and soybeans.

Thirteen percent of the corn in the top 18 producing states has been planted according to the USDA?s Crop Progress report released May 2. Although it is a four-percent improvement from last week, nationally the 2011 corn planting is 27 percent behind the five-year average and 53 percent behind 2010?s progress.

North Carolina (88 percent) and Texas (79 percent) continue to lead the states in planting. Colorado (18 percent), Kansas (41 percent), Kentucky (17 percent), Missouri (32 percent), Nebraska (15 percent) and Tennessee (38 percent) reported percentages above the national average. Nine states fall below the national average of 13 percent. North Dakota is the only state to have yet to begin planting. More than half of the reporting states indicated less than 1 percent improvement from last week?s report. Planting is more than 70 percent behind last year?s pace in Minnesota, Iowa and Illinois.

Corn has emerged in five percent of the states, which is four percent behind the five-year average and 13 percent behind 2010?s pace. North Carolina (59 percent) and Texas (57 percent) reported the highest percentages of emerged corn. North Carolina is the only state to report a higher percentage of corn emerged than both its state?s 2010 report and five-year average. Of the nine states reporting emerged corn, just three ? Illinois (3 percent), Nebraska (1 percent) and Ohio (1 percent) ? fell below the national average.