Cooler-than-normal temperatures have persisted throughout most of the first half of May. This has slowed the early crop development, and has delayed the emergence of soybeans planted in the past couple of weeks. Overall crop conditions in south-central Minnesota continue to be very good, with nearly all the corn planted and 90% of the corn or more emerged in most areas. Soybean planting is 85-90% completed in most portions of the region, with earlier-planted soybeans emerged. There have been very few emergence or early seedling growth issues thus far with the corn and soybean crop in this region – other than the continued cool weather pattern.
The normal accumulation of growing degree units (GDUs) from May 1 to May 15 at the University of Minnesota Southern Research and Outreach Center (SROC) at Waseca, MN, is 130 GDUs. The GDU accumulation in 2009 is about 10% behind average, but is ahead of the GDU accumulation in 2008 in mid-May. One big advantage in 2009 is that the majority of the corn in south-central Minnesota was planted in April and was able to take advantage of some GDU accumulation in late April. By comparison, the majority of the corn in 2008 was planted after May 1. Accumulated precipitation for the month of May at the SROC facility through May 14 was 1.35 in. Total average precipitation in the month of May is 3.96 in. Through the end of April the total 2009 precipitation at Waseca was 5.96 in., which is about 2 in. below normal precipitation.
The eastern Corn Belt continues to lag well behind normal for corn-planting progress. As of May 10, Illinois had only 10% of the corn planted, compared to a normal of 84% planted. The percentage of corn planted was only 11% in Indiana and 22% in Ohio, compared to normal planting progress of near 70%. By comparison, both Minnesota and Iowa had 81% of the corn planted on May 10, compared to normal planting percentages of 69% in Minnesota and 76% in Iowa. As was mentioned earlier, over 95% of the corn was planted by May 10 in most areas in southern Minnesota and northern Iowa. Nationwide, 48% of the corn was planted by May 10, compared to an average of 71%.
Grain Markets Have Strengthened
Grain markets have been considerably stronger in recent weeks, responding to improved demand, tighter grain stocks and, more recently, to planting delays in some parts of the Midwest. Cash corn prices at local grain elevators in southern Minnesota were in the $3.75-3.85/bu. range on May 15, compared to $3.15-3.20/bu. in late February. Even with the improvement in recent weeks, current cash corn prices are about a $1.75-2/bu. lower than cash corn prices in mid-May 2008. Similarly, cash soybean prices at local grain elevators have been very strong in recent weeks, and were near $11/bu. on May 15, which is $2-2.50 below the cash soybean price in mid-May 2008. Cash soybean prices have risen over $3.50/bu. since late February, primarily due to strong demand and a shortage of 2008 soybeans available to sell.
Many farm operators had already sold forward priced a significant amount of their 2008 grain inventory before the rise in market prices in recent weeks. However, for farm operators who still have a considerable amount of 2008 corn and soybeans stored on the farm waiting to be sold, it would probably be a good farm-management decision to take advantage of favorable marketing opportunities to liquidate some of the remaining 2008 grain inventory. Typically, cash prices for old-crop corn and soybeans tend to decline after late June in most years, unless there is a major crop-production challenge looming, such as a drought.
New-crop prices for 2009 grain have also improved considerably in recent weeks at local grain markets, ranging from $3.85 to over $4/bu. for corn, and in the $9-9.50/bu. range for soybeans. While these forward pricing opportunities are below pricing levels at this time in 2008, the corn and soybean prices currently available for the 2009 crop are considerably better than a couple of months ago. The 2009 grain prices above $4/bu. for corn and above $9/bu. for soybeans should be above breakeven prices for most crop producers in southern Minnesota. There also may be some opportunities in the next few weeks to forward-price some of the 2009 corn and soybean crop at profitable new-crop prices, either at harvest or for postharvest delivery. The new-crop corn and soybean prices also tend to decline after late June in most years, unless there are production or supply factors affecting the grain markets. Of course, in the past couple of years, grain markets have not been following normal patterns very closely, due to wide swings in worldwide demand and the very unstable world economy.
Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.