According to a recent Reuters news release, U.S. corn futures spiked on Tuesday as concerns stemming from slow planting progress fueled a sharp rebound from the previous session, marking a higher closing price for the first time in four sessions.
Corn futures rose 1.6% (7.75 cents) to $4.96-1/4 a bushel after sinking 1.3% on Monday. Weather is the driving force behind the rising prices as lingering effects and cool soil temperatures from a harsh winter have delayed planting. Additionally, expected rains across much of the Corn Belt in the coming weeks may further prevent producers from getting the grain in the ground. In the Reuters release, Jim Gerlach, president of A/C Trading, said, “The thought is that whatever doesn't get planted here in the next five days may have to be planted around puddles."
The latest USDA Crop Progress report shows across the 18 states that produce the vast majority of the nation’s corn, just 6% of the crop has been planted. While this number is ahead of last year’s to-date pace of 4%, it trails significantly behind historical averages (14%). Specifically, key corn producing states such as Illinois (5% planted) and Iowa (2%) are falling behind historical averages while planting in Minnesota (0%) and South Dakota (1%) are just entering the first stage of progress.
The combination of a late start to planting and unfavorable planting conditions in the near future for much of the Corn Belt have been the driving force behind the recent increase in corn futures on the Chicago Board of Trade.