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Crop Progress - Following 2018

Published on Monday, April 29, 2019

As we move into the first of four critical weeks of planting, Corn planting advanced to 15% in lock-step with 2018.  See chart below.

A full view of results can be found in the following table.

What becomes quickly apparent is that while we are patterning the 2018 planting pace, we are still 12% behind the five year average.  Weather conditions point towards a wetter cooler pattern in the coming 1-2 weeks (See 8-10 outlook above).  And while there is a case to be made for delayed planting, traders will be quick to point toward last years near record yield (176.4 vs the 2017 record of 176.6 bpa) following the slower start to planting.  In any given season, there are four prime weeks to plant corn.  This past week marks the first with three weeks to follow.

How we compare to last year (and ultimately the five year average as we close out week four) will provide some direction to markets.  However, what still may serve as a powder keg for potential rallies is the current fund position.  Last week, fund managers added another 18,000 contracts to their already record short.  See Corn COT chart above.  With a short position of 344,000 contracts, any exit made by this group could well serve the market for a brief period.

Give us a call to sort through strategies suitable to managing these situations.