Montreal, Canada

According to this morning’s Grain Insight, published by Bill Gary, U.S. corn planting is reported to be significantly behind last year’s pace in most major states. This possibly sets the stage for another super-spike in corn prices this summer as other critically important harvests in Russia and Canada are set to announce crop production.

Corn planting progress, which shows the number of states already planted, is down across the board compared to last year with North Dakota showing the best results or unchanged; the worst year-over-year percentage decline is in Illinois, down 20%. Other big declines in corn plantings include Indiana, Iowa, Minnesota and Missouri.

But it’s not just corn that’s falling behind last year’s growing cycle.

Spring wheat is only 5% complete compared to 18% in 2010.

Worse, oats planting was only 39% completed compared to 62% last year.

The agriculture sector shows the greatest degree of negative market correlation to stocks. That makes things like corn, coffee and wheat excellent portfolio diversification tools in a down market.

In 2011, corn and wheat are poised to dominate the grains sector. We’ll know more about this year’s planting progress next month when 50% of the crop should be planted, according to Bill Gary.