Extended rains hit commodity markets

Rain delays buoying corn prices. Major corn states well behind five-year average planting pace.

Rain-delayed planting is having a ripple effect in the commodity markets.

“Corn is the commodity that is the most weather-sensitive at the moment,” Scott Stiles, Extension economist-risk management, for the University of Arkansas Division of Agriculture, said Thursday. “Ending stocks are very tight for corn. 2011 needs to be a great year, and it’s not starting off well.”

While last Monday’s crop report showed Arkansas’ corn planting progress to be in line with the five-year average, “the futures market is concerned with the slow planting progress in key corn states.”

Illinois, Iowa, Indiana, Nebraska and Ohio were all well behind their five-year average pace. For example, Iowa’s five-year pace at this time is 28 percent planted. This week it was only 3 percent.

“Given an adequate break in the weather, a lot of acreage can be planted in a week,” Stiles said. “I can recall one instance where 43 percent of the U.S. corn crop was planted in a week. That’s the kind of break we need over the next two weeks to get back on track.”

Stiles said Thursday that September corn futures were being supported by the planting delays. Since April 1, the contract was up 35 cents, trading at $7.16. Mississippi River new crop bids for August-September delivery range from $6.95 to $7 on Thursday.

For more information about agricultural economics and risk management, visit www.uaex.edu. For information on disaster recovery, visit http://www.uaex.edu/news/pressroom/storm_recovery/, or contact your county Extension office.

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