Fallout From USDA Report Monday
The dust has finally settled after Monday's shocking USDA report. Corn has stabilized about 50 cents a bushel lower. Actually there are more questions about the acres of corn and beans that were planted after the report than before! Plus, there are questions about how the USDA did or did not include the prevented plant acres. Monday afternoon after the USDA report the USDA's Rick Management Agency released their Prevented Plant acres which were 11 million acres of corn and 4 million of soybeans.
The USDA said we have about 91 million acres of corn this year and it did include the prevented plant acres. Does that mean when you subtract the 11 million prevented plant corn acres we actually have 80 million acres of corn? Does it mean we intended to plant over 100 million acres of corn and actually planted 91 million? Well, the corn market assumed the latter because corn dropped the daily limit after the report. However, never in history have we had or intended to plant 100 million acres of corn or any other crop.
I read one analyst trying to explain why farmers intended to plant over 100 million acres of corn this year. Last May December corn rallied to about $4.70 a bushel. With the China trade war beans were not profitable and corn was. Corn was very profitable back in 2012 and 13 at 7 dollars a bushel and we bit not have anywhere near 100 million acres of corn?