In what can only be described as a historical market shocker, the nation’s farmers last week indicated planted corn acres at merely 92 million, per USDA’s Acreage report. Although this reflects an increase of 3 percent over last year’s late-planted crop, it is down 5 million acres from intentions noted in the March Prospective Plantings report. The market had been anticipating acreage closer to 95 million and took the report as an opportunity to rally corn futures.
March’s initial forecast was always a questionable figure. As we have mused during various podcasts, webinars, and direct conversations: Why would producers want to plant so much corn acreage knowing the effect burdensome ending stocks would have on pricing? It seems farmers considered how the potential balance sheet would play out on prices (while watching COVID-19’s impact on demand this year) and considered such strong plantings a risky proposition.