With the current planting pace, according to Pedro Schicchi, Market Intelligence of Grains & Oilseeds at hEDGEpoint Global Markets, one should not expect any deviation of productivity from the trend in corn, but the good pace of soybeans can have a positive influence on the crop.

"It's important to mention that we shouldn't expect any impact on next week's WASDE yields already. That's because the USDA generally considers trend productivity in its initial estimates. The agency typically only takes into account other factors in initial productivity estimates when the pace of planting is drastically affected, but for the worse — which is not the case this year," Schicchi said.

A good indicator for next week, he said, is the February Outlook Forum. In it, the USDA issued 181.5 bu/ac for corn and 52 bu/ac for soybeans. These can be considered as the "trend" and May's WASDE should bring something close to those numbers.

Expected effect on productivity

Early planting usually has a positive effect on productivity. However, some nuances should be pointed out, according to the hEDGEpoint analyst.

"First, good planting pace is not everything. It doesn't save a crop if it goes through bad weather conditions later when the yield is being set. Hence the second point, the effects are relatively small. However, corn is more sensitive than soybeans, as shown by the difference in R² between the two regressions below. This result agrees with the general intuition that corn is more subject to agrometeorological factors throughout development, while soybean is more resistant, being vulnerable mainly in reproductive stages," he explains.

According to the analysis, some cutoff dates are more correlated with yields than others. For corn, the more American farmers can plant by mid-May (~May 14), the better. For soybeans, the cutoff date is closer to the end of May. Given this, we project the percentage planted in this period, if planting continues at the same pace.

"If corn planting stays at the average of the last 12 years, we should not expect any deviation from the trend. At first, this would be a neutral factor, but with current planting intentions and a trend of 180+ bushels/ac, it takes a bearish contour. For soybeans, we considered the planting rate maintaining the maximums of 12 years (Figure 2). This results in a positive influence on productivity (about +1.2 bushels/ac above trend), but it is not as impactful as if corn were similarly advanced," Schicchi predicts.

Climate will be key 

As always, weather will be key, with the famous "American climate market" entering the picture. In the short term it is important to continue observing the climatic conditions for planting. According to the hEDGEpoint analyst, the next 2-3 weeks will be when we hit the previously mentioned cutoff dates.

"From there, we started monitoring the usual signs of good conditions for development: abundant water and not too high temperatures," he adds.

Seasonal forecasts point to a warmer-than-average summer and near-normal precipitation across most of the U.S. corn belt — with surpluses mostly in the west but (mild) deficits in the east. 

"This scenario certainly raises some concern, especially in places where below-average precipitation meets above-normal temperatures. However, again, rainfall deficits are expected to be mild and long-term forecasts should be taken with caution. Thus, the outlook is still positive for the development of the crop – although with caveats," said Schicchi.