This morning the USDA provided an updated planting report and the market was taken for a ride lower due to above expected corn and wheat acres. The following is commentary from Jon Driedger of FarmLink Marketing Solutions and Stephan Gmehlin of Farms.com
Below is Jon Driedger of FarmLink Marketing Solutions commentary.
The corn acres was the big surprise, and today€™s trade clearly reflected that. Wheat was a bit negative as well, but managed to hold up relatively better than the corn. The soybean numbers came in roughly as expected, confirming an S&D that has little room for yield adversity going forward, which allowed it to hold up quite impressively today given the negative sentiment coming from corn.
As with all major government reports, the market€™s reaction to the news over the coming days will be more important than the numbers themselves. Sentiment may have shifted, but the main crops still have a lot of weather ahead to trade, and in the case of corn and wheat, current values have already priced in a fair amount of bearish news in recent weeks. Most of the minor crops are indicating smaller year-over-year plantings in the U.S., including some important ones to western Canadian growers such as canola, barley, flax, mustard and dry beans. So while the overall initial impression of this report was bearish, it will take some time for the markets to fully digest the details, and for prices to respond in local terms.
Stephan Gmehlin commented on Farms.com this morning that, USDA surprised many people with this years Acreage report. Corn acres were actually up 2 million acres from the spring planting intentions report with an estimated 87 million acres this is the second largest corn crop planted since 1946, behind 2007. Iowa planted 13.7 million acres and Illinois added 200,000 acres from 2008 for a total of 12.3 million acres with Nebraska rounding out the top 3 states at 9.4 million acres. This corn acreage figure is a total surprise as most analysts were looking for acres to go down from March planting intention report, but this figure from USDA exceeded even the highest estimates of analysts by a million bushels.