While corn and soybean acreage estimates announced at USDA’s Agricultural Outlook Forum appear sensible, its carryout numbers are questionable, experts tell the U.S. Farm Report Market Roundtable.
It is still early to project acreage for both crops, but the numbers are in line with what the market has been discussing for a month, says Naomi Blohm, Stewart-Peterson.
"The corn number is not quite as drastic as far as the cut in acres, but again, it is early," Blohm notes. "With the kind of spring that we’ve been having, and lack thereof, there is just no end in sight. It’s just too early to say that it’s all concrete for what we’re going to be planting this year."
Brian Roach of Roach Ag. Marketing, Ltd. recommends looking at the soybean estimate— 79.5 million acres—as a starting point.
"Traders thought the bean acre number would be slightly higher," Roach explains. "But we’ll still have to see how that plays out. It’s early in the year, it’s just a starting point. The corn acre number is about where traders thought it would be, and when you look at the ending stocks number, that’s still really the guidance here. We expect there to be a big crop. Demand will be up but not up as much as what we’re seeing here today. But it’s still back to a starting point, and I think we’re going to move right on into spring and look at what really gets put in the ground."
Less certain are the carryout figures that USDA also announced.
"It’s very premature and a little bit of a fluffy estimate in my opinion," Blohm says. "You’re assuming perfect spring, perfect summer. Everything has to fall into place for that to happen. So is it a scenario that could happen? Absolutely. Right now you can only give it 10% odds. So for now my opinion strongly is that we’ve seen a bottom in this (corn) market and we’re going to see sideways to firmer prices from here."
Revisions to figures for corn ending stocks, demand and supply point to future new-crop opportunities, Roach adds.
"It’s setting at least the volatility for some spring weather to drive some pricing opportunities, I think," he says. "If you look at the weather, the weather is anything but normal. I think when you blend all that together, we’ll have some good chances to get some sales on."
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