Monday, May 13, 2013

Corn planting race against time

A very interesting risk is being faced by corn traders - the race against time to plant. With poor spring weather the planting of this year's corn crop has been delayed. As of the most recent report, only 28% of the crop has been planted. The average for the last five years has been 65% and last year the amount planted by this time was 85%. 

What makes this so critical is that after May 20th, the number of growing days will be potentially curtailed and the yield per acre will decline. The farmer's rule of thumb is that you lose 1 bushel per acre for every day of planting delay after May 20th. Additionally, the key pollination period will move to later in the summer which will also affect the yield if there is a hot period at this critical time.

Hence, there is a race against time to reach for potential maximum yield. Very few markets face this type of risk.  

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