Counting the cost to the industry of a potentially “wet June” in the US Corn belt.
The USDA Monday 3rd June weather Outlook is not for “great reading” or indeed great visuals.
Outlook: A slow-moving cold front ….. A subsequent storm system ….. Five-day rainfall totals could reach 1 to 4 inches or more from the central and southern Plains eastward …. The National Weather Service 6- to 10-day outlook for June 8 – 12 calls for near- or above-normal rainfall across most of the country….
Not a problem if the corn crop is in the ground and all fieldwork done but with the USDA Crop Progress report (28th May) showing only 58% of the corn crop planted vs. 90% last year and only 29% of soybeans planted compared with 74% last year clearly this is not the case..... and all down to persistent heavy rain following the mid-west spring floods.
A lot can change in a week but with a wet early June forecast getting planting “back on track” looks a lot less likely. Probably now the most likely case scenario going forward is that there will be an estimated 10 million “prevented plant” corn acres and 3 million “prevented plant” soybeans.
The loss of potential value to the seed and crop protection industry; if that land lays fallow, is somewhere upwards of US$ 1.3 bn or looking at it another way not too far off the size of the German Crop Protection market.
Whatever the eventual “prevented planted” acreage turns out to be we can expect some “Market Share Shifts” as a result this year as companies react to this situation with different marketing strategies; such as early maturity corn hybrids or a shift to soybeans; in the hope that the Trade Wars with China finds a resolution before the next marketing year begins.