The current corn crop appears to have materially overcome the delays of a wet spring. April's plantings were 30% behind normal. The picture became grimmer when May's plantings were as much as 50% behind normal. This led to serious concerns as yield has been directly correlated to planting date, with yield falling consistently with date planted after May 1st. However, through the modern technology of GPS, tractors were able plant through the night as the weather allowed. This led to being fully planted by USDA Grain Report June's acreage report. Now, corn has been in the ground and had a chance to grow with some periods of sunshine and good ground water tables. Mother Nature has done her thing as corn across the country has been racing to catch up. Currently, even with all of the delays in planting, corn rated in "good to excellent" condition is ahead of the five year average!
Given the drastic change in perspective from a dire spring to excellent condition as we head into the pollination period, it's not surprising that the market has sold off as dramatically as it has. However, it's important to keep a global perspective on the corn market. Even if corn is on the pace of 155 bu/acre yields, at 87.5 million acres planted this will still leave us with a stocks to usage ratio at or, near all time lows. This is also consistent with the International Grain Council's expectation of global ending stocks being 24+ mmt lower than last year. Furthermore, with the Dollar expected to decline through the end of the year, we will continue to see strong export demand, especially in China as Hog feed usage continues to climb. We will be able to track China's purchases through the Commitment of Traders Reports.Ultimately, as we have fallen to test the April - June congestion between $5.70 and $6.20, traders and hedgers should prepare to use this as a longer term buying opportunity.
