Dry weather puts late U.S. soy plantings in jeopardy
Julie Ingwersen, Reuters, 06/25/2012
Kelly Robertson jammed a screwdriver into the hard, dry ground on his farm in southern Illinois, carved out six inches (15 cm) of soil and could not find any moisture.
Because of the dry conditions, Robertson, who grows corn, soybeans and wheat near Benton, Illinois, did not begin planting soybeans until last week, fearing the seeds would not have enough moisture to germinate.
"We sit here and wait for a rain. More correctly, we sit and wait on multiple rain events because one rain ... is not going to be enough," Robertson said in a recent interview.
Dry weather is impeding late soybean planting, a factor that may limit any increase from the U.S. Department of Agriculture's March soybean planting intentions figure of 73.9 million acres.
USDA's March soy figure came in below trade expectations and, if realized, would represent the fewest acres planted to soybeans in five years. The government is scheduled to release updated acreage figures on June 29.
Some private analysts, such as Informa Economics, have predicted that USDA will raise its soybean plantings figure by more than 2 million acres next week to account for historically high soybean prices that may have encouraged farmers to plant more than they intended in March.
In particular, analysts expect a jump in so-called "double-crop" soybeans, which are planted as a second crop on winter wheat fields shortly after the wheat is harvested.
But others are more pessimistic about a soy acreage increase, citing farmers like Robertson who have struggled for weeks with parched conditions.
"I think we've probably lost 40 to 45 percent of the potential increase already, with more coming if we don't we don't get rains by the end of the month," said Mike Zuzolo, president of Global Commodity Analytics in Lafayette, Indiana.
"Clients in Kansas and Indiana -- any areas that are dry right now (who) would be double-cropping after wheat harvest -- are holding back," said Zuzolo.
"This weather is starting to impact the beans with almost a multiplier effect because of the acreage and the yields both being hit," Zuzolo added.
Every bushel will be crucial for global soy supplies because drought has slashed soy crops in Brazil and Argentina, the No. 2 and 3 global producers, leaving farmers in the United States, the world's top soybean grower, to fill the breach.
Most of the U.S. crop is already in the ground. The USDA stopped reporting soybean planting progress after June 10, when it said 97 percent of the crop had been seeded. But planting of the last soybean fields can continue until mid-July.
"If you stay dry for another two or three weeks, it becomes too late to double-crop the beans after wheat," said Mark Schultz, analyst with Northstar Commodity in Minneapolis.
" They need moisture in next three weeks, or double-crop beans on those acres could be at risk of not even being planted," Schultz said.
MOST DOUBLE-CROP ACRES SINCE 2008?
Double-crop soybeans have comprised between 3 and 9 percent of total U.S. soybean acreage for the past 20 years, according to U.S. Department of Agriculture data. USDA estimates the amount of double-cropped soybeans once a year in its June acreage report, deriving its number from farmer surveys.
The recent high was 2008, when farmers planted approximately 6.8 million acres to double-crop soybeans, representing 9 percent of all U.S. soybean planted acreage -- the highest percentage since 1996, and the most outright acres since 1984.
Spot CBOT soybean prices were near current levels in the spring of 2008 and touched an all-time high at $16.63 per bushel that summer. CBOT November soybean futures settled Friday at $13.75-1/2.
Analysts from Citigroup, Doane Advisory Services and Newedge USA expected double-crop soybeans in 2012 to comprise 7 to 8 percent of overall plantings, at close to 6 million acres. But others cautioned that the final total might fall short, regardless of what USDA projects next week.
"The (USDA) survey was taken as of June 1st, before a lot of the weather concern hit us, so farmers were likely still talking big double-cropping," ABN AMRO analyst Charlie Sernatinger said in a note to clients.
"But the revisionist theory of world history," Sernatinger said, "is that a half million of those double-crop acres will never go in the ground unless the skies open up and pour forth moisture." (Reporting by Julie Ingwersen; Editing by David Gregorio)