Corn Rises on Delays to U.S Plantings

May 06, 2022

By Naveen Thukral and Sybille de La Hamaide

Chicago corn futures rose on Tuesday as adverse weather delayed U.S. planting, while soybeans and wheat edged lower but held above the multi-week lows hit in the previous session, traders said.

The most-active corn contract on the Chicago Board of Trade (CBOT) climbed 0.4% to $8.06-3/4 a bushel, soybeans lost 0.2% to $16.41-1/2 a bushel and wheat fell 0.1% to $10.54-1/4 a bushel.

Soybeans were under pressure from falling crude oil markets and cool and wet conditions in the U.S. Midwest that continued to limit corn and soybean planting. Some analysts think delayed U.S. corn planting could push farmers to plant more soybeans.

The USDA said the seeding of the U.S. corn crop was 14% complete by Sunday, lagging the average analyst estimate of 16% and well behind the five-year average of 33%. U.S. soybean planting was 8% complete, matching trade expectations but behind the five-year average of 13%.

The U.S. Department of Agriculture (USDA) on Monday rated 27% of the U.S. winter wheat crop in good to excellent condition, unchanged from the previous week and the lowest for this time of year since 1996, underscoring the impact of drought in the Plains wheat belt.

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Video: Wheat Yields in USA and China Threatened by Heat Waves Breaking Enzymes

A new peer reviewed study looks at the generally unrecognized risk of heat waves surpassing the threshold for enzyme damage in wheat.

Most studies that look at crop failure in the main food growing regions (breadbaskets of the planet) look at temperatures and droughts in the historical records to assess present day risk. Since the climate system has changed, these historical based risk analysis studies underestimate the present-day risks.

What this new research study does is generate an ensemble of plausible scenarios for the present climate in terms of temperatures and precipitation, and looks at how many of these plausible scenarios exceed the enzyme-breaking temperature of 32.8 C for wheat, and exceed the high stress yield reducing temperature of 27.8 C for wheat. Also, the study considers the possibility of a compounded failure with heat waves in both regions simultaneously, this greatly reducing global wheat supply and causing severe shortages.

Results show that the likelihood (risk) of wheat crop failure with a one-in-hundred likelihood in 1981 has in today’s climate become increased by 16x in the USA winter wheat crop (to one-in-six) and by 6x in northeast China (to one-in-sixteen).

The risks determined in this new paper are much greater than that obtained in previous work that determines risk by analyzing historical climate patterns.

Clearly, since the climate system is rapidly changing, we cannot assume stationarity and calculate risk probabilities like we did traditionally before.

We are essentially on a new planet, with a new climate regime, and have to understand that everything is different now.