Market Matters Blog

Five percent of the U.S. corn crop was planted as of April 28, according to Monday's USDA Crop Progress report, the slowest start to planting since 1984. Earlier that same day, December corn closed up 35 1/2 cents after the weather forecast turned cooler and wetter for the central U.S., increasing concerns that corn will be planted late in 2013, or in some areas, may not be planted at all. It is generally assumed that corn yields fall when planted after May 15. What happened to the corn crop of 1984? Did it survive the slow start?

On May 9, 1984, USDA reported 5% of the corn crop had been "seeded in the 17 major producing states, compared with ... 13% average." The report went on to describe a scenario that could have been written today. "Cool wet weather dominated much of the nation throughout the month (of April). Average temperatures for the month were 4 to 8 degrees colder than normal from the central Rockies into the lower Ohio Valley and from the central Plains to the southern and central Appalachians."

Unlike this year, however, that 1984 report went on to say, "Temperatures were warmer than normal through the northern tier of states and into Canada." In 2013, the northern states and Canada have suffered a long, cold spring and soil temperatures are still in the 30s.

Now jump ahead to June 11, 1984: USDA published this description of May fieldwork: "Widespread rainfall delayed fieldwork across the eastern half of the nation for most of May. Land preparation and planting fell further behind schedule ..." Did the corn ever get planted? Well, yes. The rest of that sentence read, "... planting fell further behind schedule until midmonth when a week of generally open weather allowed rapid progress."

As it turned out, the corn crop that was only 5% planted on May 9, 1984, was 90% planted on June 3, 1984, thanks to the resourcefulness of American farmers and that one week of "generally open weather." Corn production totaled 7.674 billion bushels that year, 638 million bushels more than total use. Corn prices for the December 1984 contract dropped from $2.99 a bushel on May 9 to $2.65 3/4 by the end of November.

Does this mean that all will go well in 2013 and we will grow that 14-billion-bushel crop after all? Not necessarily. There are plenty of differences between the corn markets of 1984 and 2013. There are also great differences in the ability to plant large tracts of corn and in corn survivability and production. It is also worthy to note that the average start date of corn planting has gotten earlier over the years from 1984 to 2013. Info from Darrel Good at the University of Illinois said the late corn-planting date in 2013 is about 10 days earlier than it was in 1984.

I explained my concerns about the rosy outlook for 2013 corn production in the April 11, 2013, article, "Is It Time For December Corn?" However, the lessons of 1984 should give us pause before we race out and buy corn at limit-up prices. The markets are understandably concerned about this year's slow start, but it is still early and those concerns could evaporate with one week of generally open weather. May should be an interesting month.

Todd Hultman can be reached at todd.hultman@telventdtn.com

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