by Agrimoney.com
They say oats are a leading indicator on crop prices. Are they a signal on corn condition too?
As if the corn market did not have enough to worry about from late sowings, and the prospect of abandoned acres, oats data has shown that the quality of the crop which has made it into the ground may not be that good either.
US Department of Agriculture data overnight showed the deterioration already highlighted in winter wheat spreading into rice, where the proportion rated in "good" or "excellent" condition fell by five points to 49%, compared to 68% last year.
Furthermore, the first rating on the US oats crop came in with 56% in those top two rating bands, down from 80% a year ago – a factor which could bode ill for corn.
The statistics "may indicate" that, when the USDA next week publishes its first ratings on the US corn crop, the proportion rated in the top two bands will be below 56%, Don Roose, president of US Commodities told Agrimoney.com.
Corn vs oats
"The first row crop to get rated that has been planted in the spring and grown up is oats. That makes it of interest in looking at corn."
While Mr Roose said he was not aware of any historic link between oat and corn yields, "the question is, why is corn going to be any different? Why is it going to be in excellent shape, if oats is worse than last year?"
Some of the big oat states of Minnesota and North and South Dakota were big corn growers too. That said, oats in these areas appeared to have got a better-than-average start, with Ohio and the parched state of Texas looking a bigger threat than the wet northern region to oats' hopes.
The USDA said that in Texas, where the grain is winter sown and often cut for hay, "wheat and oats dried out due to windy conditions and hot temperatures in areas of the Plains".
About one-third of Texas's oats crop had been harvested as of Sunday, with 14% of winter wheat in silos.
'Worrisome but not critical'
The USDA reported revealed that farmers had continued to play catch up on delayed corn sowings, getting 79% of the crop in the ground, only eight points behind the average pace.
Nonetheless, the figure is slightly below the figure the market had expected, with Ohio growers having only planted 11% of their corn as of Sunday, compared with an average of 80% by now.
With the optimal sowing window now well past, and the cut-off dates approaching when growers can apply for insurance payouts on unseeded crops, the slow pace is prompting expectations that corn area will miss earlier expectations.
And the briefing showed corn developing late, as might be expected from delayed plantings, with only 45% emerged compared with an average of 59%.
"How serious is this situation? Worrisome but still not critical in our opinion," a report by Paragon Economics and Meyer Consulting said.
"Three years ago was the slowest emergence year since 1999 and the national average yield that year was 153.9 bushels per acre, 2.3 bushels per acre above the trend yield."
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