Column: U.S. corn acreage shocker revives carryout scrutiny, threatens record crop
Market participants have been perplexed that U.S. farmers planned to plant the second-largest corn area in more than eight decades, with futures at 14-year lows and stockpiles expanding to eye-popping volumes.....MUCH MORE
Most historical data supports the idea that American farmers love to plant corn even in trying times. But 2020 offered up enough roadblocks for producers to drastically change plans over the last few months, and the latest acreage number published on Tuesday makes the new-crop balance sheet a little more interesting.
The U.S. Department of Agriculture’s second round of farmer surveys for crop area and corn plantings came in at 92 million acres, well below the pre-report range of guesses and down 5 million acres from the March report.
That was by far the biggest change in corn acres from March to June since Freedom to Farm in 1996. Within the last 40 years, only 1983 featured a larger change between the two surveys as corn plantings dropped nearly 14%.
Prior to the report, analysts saw U.S. corn plantings at 95.2 million acres on the expectation that wet weather had prevented some planting in the Dakotas and Delta states. That surely happened, but weather was not the only factor in the lower acres.
Chicago futures soared after the data was released on Tuesday, with December corn rising 4.7% on the day. The most-active contract tied Nov. 28, 2018 for the largest daily percentage gain in exactly three years, though December futures remain lower than in prior years.
WHERE ARE THE ACRES?
Analysts over-guessed most major acreage estimates, with their corn miss the most prominent. They were too high on soybean and wheat acres by 1% apiece. Their cotton guess was 8% too high and they over-cooked sorghum by nearly 5%.....
Here's the reaction in the futures via FinViz:
With both soybeans and to a lesser extent, wheat also trading higher.
