“Surprise” might be an understatement. Wednesday’s Prospective Plantings Report sent corn and soybean markets limit-up after USDA’s National Ag Statistics Service announced expectations for 91.1 million corn acres and 87.6 million soybean acres. Both of those predictions were more than two million acres fewer that the average trade expectation.
Commodity prices are at their highest levels in several years. Shouldn’t both of those figures be higher? When the June 30 acreage report will be released, the consensus is that there will be more acres devoted to both crops, especially if favorable weather allows it.
But at least one analyst is not ready to raise the numbers.
“When you look into this report in a lot more detail, and look at all these major crops, there are no acres missing,” says Brian Burke with John Stewart & Associates near St. Louis. “Total major crops, which is all your feed grains, oilseeds, plus cotton and wheat, we had 252.5 million acres of major crops. That’s seven million acres more than last year, and that’s two million acres above the 20-year average.”
Burke says in the last 20 years, there have only been three in which we have been significantly above the 20-year average for total major crop acres. “There’s a full accounting of the acres in here, it’s just: How much went to milo, how much went to the wheat increase, how much went to cotton, when some were expecting those to be lower?”
Burke says the idea of getting 94 million acres of corn is not impossible, but he also also wonders from where those additional acres will come.
“It is going to be a battle, and price is usually the ultimate decider of how that battle plays out, but we have a pretty full accounting of the U.S. acres on this report. We’re either going to have to rip up some wheat and plant corn and beans instead, or have a record amount of double-crop beans. Those things could happen, but I would not get totally fixated on the fact that we’re going to get to June and everything’s going to get to 93-94 million corn and 89-90 million beans.”