Kub's Den

When you're facing a deadline, nothing ever seems to happen as quickly as it should. Simple tasks take twice as long as you planned; unexpected challenges pop up to completely distract you; people and previous commitments prevent you from buckling down and finally finishing the work. It's an unpleasant, panicky feeling, and everyone has felt it at some point or another. Especially farmers trying to finish baling a hayfield before the rain.

Even the U.S. corn crop of 2017 has experienced that sensation of always being behind, always being late. That has been the one defining characteristic of this season when, by all other measures, the crop has been marked by a dizzying array of diverse circumstances. From extreme drought in the Northern Plains to extreme flooding at several Southern locations, the best word for this year's corn-growing scenario is usually "varied." But one aspect has been shared almost everywhere at some point -- the slow progress. As of mid-May, the nationwide overall planting progress had technically caught up to the previous five-year average expectation, yet still 11 of the top 18 corn-producing states were behind pace. Michigan was 17 points behind pace.

From that inauspicious start, the crop never really caught up. Any windshield tour across the Corn Belt, especially in the northern tier but also in many waterlogged locations farther south, would show corn fields that looked ... fine ... but noticeably shorter than one would otherwise expect them to be at any specific time of year.

The weekly USDA Crop Progress numbers have documented this phenomenon. While the 2017 corn crop was emerging from the ground, it was doing so anywhere from 1 percentage point to 5 percentage points behind its average pace. When the crop was meant to be silking, it really started to fall behind its normal deadlines -- as much as 8 percentage points behind the five-year average during the second week of July. Now that the kernels are in dough stage or denting, the nationwide numbers are starting to catch up to their average but are still behind. Only 16% of U.S. corn fields were dented in the latest Crop Progress report, compared to a previous five-year average of 20%.

Compare this slow pace (this anxiety-inducing falling behind on a deadline) to the case of soybeans. They also started out the season behind their average pace of progress, with only 37% of the nation's soybeans emerged at the end of May, compared to an average expectation of 41% emerged.

But then this miracle crop caught up.

By extrapolating the weekly figures, I calculate that it was sometime during the night of June 5, 2017, that the U.S. soybean crop went from "behind pace" to "right on schedule." Now there are over 80% of fields setting pods already. In this week's Crop Progress report, this stage of soybean progress was 4 percentage points ahead of the five-year average pace.

The implications have been relatively bearish for soybean futures prices, and indeed, that market has been the leader of the downward direction on the grain board through the past five weeks. The new-crop November soybean contract has collapsed 12% from its 7/11 high of $10.47 per bushel, slightly outpacing corn's losses, but always seeming to be the market with the headlines that provide the overall direction. "USDA Forecasts Record-High Soybean Production in 2017," we all read last week, and the entire grain and oilseed complex continued to pursue a downward path.

Now that the corn crop has effectively completed its silking phase (97% done in the last Crop Progress report), there is less agronomic worry about hot, dry weather influencing yield. Test weights can still be adversely affected by weather, of course, and overall grain quality could diminish if there is an early frost or a wet harvest. But that's about it. This 2017 corn crop, the crop that never caught up, will hit its deadline one way or another.

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Editor's note: Elaine Kub is the author of "Mastering the Grain Markets: How Profits Are Really Made" and can be reached at elaine@masteringthegrainmarkets.com or on Twitter @elainekub.

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