U.S. farmers planted more than expected this spring, potentially giving some relief to ranchers, food companies and ethanol makers, which have endured relatively high grain prices in the past two years.
Unless there is a dramatic change in weather over the growing season or some other unexpected disruption to the crops, corn and soybean prices could stay relatively low over the coming months, analysts say.
"If there's a potential winner in this game it's going to be the end users," says Joe Victor, vice president at Allendale Inc., a commodity research advisory firm based in McHenry, Ill. Finally the industries using corn and soybeans have "got a reprieve...they can take a big breath."
The crop estimate released Tuesday by the Agriculture Department comes despite cool, wet weather early in the spring.
American farmers planted an estimated 77.5 million acres of soybeans this spring, up 2% from last year and the biggest on record, according to the Agriculture Department's crop acreage estimates. The agency estimated that the U.S. corn crop will come in at 87 million acres, up 1% from last year and the second-largest planted acreage since 1946.
The report is bearish for investors and traders who had been expecting smaller increases in planted acres this year since inclement weather was thought to have kept farmers from getting into the fields on time.
On the Chicago Board of Trade Tuesday, corn traded about 29 cents lower at $3.48 a bushel, while soybeans traded 11 cents higher at $12.26 a bushel....MORE
See also the WSJ's "Corn Traders' Cry: 'Get Me Out of Here'"