With a late corn crop and acreage much below farmers’ original intentions, plus tight stocks, and a situation shaping up much like 2012 when corn prices skyrocketed, why has the market’s reaction been ho-hum about this year’s late crop/prevented plantings?

Though fundamentals are much the same as last year, says John Anderson, senior economist for the American Farm Bureau Federation in Washington, there are enough differences that the market is taking a wait-and-see approach as to what the all-important weather will bring in coming weeks.

“I feel like I’ve been giving the same outlook presentation for about the last three years,” Anderson said at the Mississippi Farm Bureau Federation’s joint soybean, corn, wheat, and feed grains advisory committee meeting at Grenada, Miss.

“We’re set up this year pretty much exactly like last year: tight stocks and a fair amount of demand rationing  — a little more this year than last year. The bottom line situation looks very similar. We’ve got high but fairly stable prices. We’ve had a lot of volatility in the past, but we’ve settled into a historically high, but fairly stable level.

“We’re looking at potentially a big crop, a big harvest, and a big change in the supply situation that could put a lot of pressure on prices — which is basically the same forecast I gave before the start of the season a year ago. Last year, we had fantastic planting conditions and a very early planted crop that was expected to be a record.

“And we all know how that worked out,” he laughs. “Things fell apart and we ended up with the worst drought in decades over much of the country. That had a profound impact on markets, and we’re still facing a fairly short supply situation as a result of that.

“So, with this year’s late planting and acreage switches,why hasn’t the corn market been higher? There has been a lot of anxiety in the farm community about why the market hasn’t been paying more attention to this.

“On April 1, the December corn contract was at about $5.60, and even through all the late planting it never really rallied above that level. By third week of May, we had a seriously late crop, and the market was well below the April 1 price level.”

What impact does late planting have on yield potential? Reviewing historical trends, Anderson says, “As an economist, I don’t think analogous years tell us a lot. There’s not a lot of relationship between late planting and final yield. Only in 2012 and 1988 was there was a bit of positive relationship. We know that the more crop you have planted by week 19, the better your chances look, but it’s still a pretty weak relationship.

“In 1984, for example, the corn crop was really late, but final yield was 2 percent above trend. I don’t think results from a year that far in the past tells us much, since we have such different production methods and technology today.

“The point to remember is that planting date isn’t destiny; there are a lot of other things that come into play. We could still end up with a good crop this year. And I think this is indicative of why the market has been seemingly so disinterested in late planting.

“If we take a bigger view of total supply of feed grains and wheat, we’re looking at fairly large total supplies, even though corn stocks right now are tight. We’ve also seen some improvements in rice and wheat stocks, so the total supply number is fairly large — historically very large — and that’s another reason the late planting hasn’t been driving the market as much as some think it should.

“Bottom line: At this point, we shouldn’t make too much of the crop being late.”

Although the market had moved up a bit in the previous few days, Anderson says, “I think it was mostly due to soybean planting being a bit late and some positive demand numbers, rather than a reaction to late corn planting.

“If we get anything near USDA’s projection of a 156.5 bushel yield on 89.5 million harvested acres, a 14 billion bushel crop — and that’s a big if  — we’re looking at use numbers of 5.2 billion bushels of feed use, 4.9 billion for ethanol, and 1.3 billion for exports, with a total use of 12.8 billion. [USDA's June 28 report forecast a record corn crop and sent prices spiraling downward. See story here: http://bit.ly/1cvTswq]