Monday’s USDA acreage report was a surprise to Chip Flory not because of the numbers in the report, but because the acreage adjustment happened so soon in the growing season.
Flory, host of AgriTalk, says the USDA’s move to knock off 700,000 acres of corn and add a million soybean acres does make sense, but it’s earlier in the year to make that adjustment than anticipated.
What is less surprising, Flory says, is the rather robust predicted corn yield that remains a firm 183.1 bushels per acre even without the southeast crop in the mix.
The Corn Belt is living up to its name, he says, with the I states posting some huge yield potential, and some lesser states still showing some strong potential. What’s more, the weather seems to be favouring kernel fill — further solidifying a large crop coming.
The soybean crop is no slouch either, but that’s not great news for prices, of course. Flory says that the term “burdensome” is apt when describing the possible carryout figure for the year. The corn market has had time to digest this production figure and work it in, Flory says, but beans are a different story. The carryover projection is high and the market is only now starting to deal with that (trading down Monday and Tuesday), but did bounce a little, which might be a good sign.
Flory adds that if December corn futures can close at or above $4 by Friday, he’s going to feel pretty good about it, but soybeans are a different story with no calls from China and lots of rain to fill pods. He’s looking forward to next week’s annual crop tour to solidify the production numbers for the year.
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