“The report really highlights how challenging the market is right now for major crops,” said John Anderson, deputy chief economist of the American Farm Bureau Federation. “We currently have adequate supplies both in the U.S. and globally in these commodities. It doesn’t look as though that will change. If we have normal yields, that supply side pressure will not ease up much.”
The 93.6 million acre prospective plantings figure for corn is up from 88.6 million acres planted last year, or close to three times the expected increase of 2 million acres. The December corn contract on the Chicago Mercantile Exchange dropped by about 15 cents to approximately $3.70 per bushel within a few minutes of the report’s release. The soybean prospective plantings figure came in at 82.236 million acres – on the low side of expectations, but still above some forecasts that had predicted just under 82 million acres.
Wheat acreage was also smaller than expectations. Winter and spring varieties combined were reported at 49.559 million acres. Pre-report estimates covered a wide range but averaged around 51.5 million acres. None of the publicly-released estimates were below 50 million acres. Wheat, like soy, however, will not likely increase greatly in price as long as corn surpluses remain.
Rice plantings were reported at above market expectations– 3.064 million rather than the USDA‘s projected 2.8 million acres. That could mean the highest rice acres since 2010. Reflected market prices may be softened by news of the world’s tightening rice supply, but forecasts predict a drop in prices are on the way.