When looking at the markets, farmers may feel like they are standing in quicksand, as the outlook uncertainty continues.
Chip Flory, host of AgriTalk, joined RealAg Radio host Shaun Haney to discuss some of the hesitancy in the markets, and some of the more positive news that we’ve heard as of late, including the positive run of export demand on corn in the U.S.
The March 31st Prospective Plantings report the USDA released wasn’t so favourable to the corn market; however, the Grain Stocks report was, which as Flory explains, balanced the equation out. The question following the reports for many now is, ‘Can we get all of the 92 million acres planted?’
“There’s some anxiety over that 92 million acre number in corn that’s going to prevent the selling in old and new crop. But it’s not a big enough issue or concern at this point to push that December contract back up to that $5.90 range,” he explains. (Story continues below interview)
History tells us when the market doesn’t accept good news like we think it should, many take it as a sell signal. As Flory explains, that’s not necessarily the case of what’s happening here.
“It may be telling us that the market is trying to hit the reset button, and figure out where it’s going to go from here. Even though we are anticipating some planting delays up in the Northwest production areas, we’ve got to take a look at what’s going on in the eastern corn belt — Iowa, Illinois, Nebraska,” says Flory. “I think there’s going to be enough progress on enough early acres early enough in the season that it’s going to feel like this crop is getting planted in a timely basis.”
If some of these later acres get switched out of corn, they could potentially go to soybeans, but as Flory predicts, they will likely go straight to Prevented Planting, just because of how the numbers are penciling out this year.
“I like to think that growers — if they get a chance to grow a crop — are going to produce a crop, even if it’s their second choice, or even a third choice. But I don’t know if we can make that assumption this year.”