100 Million Acres of Corn in 2020?

03:10PM Dec 03, 2019
100 Million Acres of Corn in 2020?
100 Million Acres of Corn in 2020?
( Sara Schafer )

A simple equation of the 2019 planted corn acres (90 million) and the total corn prevent plant acres (11.4 million) tops more than 100 million acres. With all the uncertainties around trade, fall fieldwork, African swine fever and farm finances, could farmers lean toward that huge number in 2020? Our stable of market analysts weigh in. 


Erin FitzPatrick
Erin FitzPatrick
Grain & Oilseed
Analyst Rabo
AgriFinance

2019 Problems Will Linger

“I don’t think we’re going to see 100 million acres of corn, but we certainly are going to see more after so many acres went to prevent plant this year. Farmers are probably going to favor corn versus beans again in 2020. The bigger thing to think about is we still have a lot of the corn crop sitting in the field. Farmers dealt with a lot of mud getting it in and getting it out. A lot of fields that went to prevent plant are full of weeds. They’re going to have a lot of cleanup before they can start laying down fertilizer and putting seeds in the field.”


Matt Bennett
Matt Bennett
AgMarket.Net

Planting Corn is Expensive

“We all need to remember liquidity ratios continue to deteriorate for a lot of producers and, quite frankly, it’s not cheap to put corn in the ground. If the price ratio is 2.2:1, then yeah, you’re going to plant a heck of a lot of corn. If the price ratio goes above 2.4 or 2.5, I think with the amount of cash people have in their pocket, there are still going to be a lot of soybeans planted. If you don’t want to see 100 million acres of corn, you’ve got to root for a bean rally. It’s expensive to put corn in the ground.”


Bob Utterback
Bob Utterback
Utterback
Marketing

Stay with Current Crop Mix Until Trade Settles

“In early August, when corn prices were stronger and bean prices were on the defensive, the feeling was 100 million acres was possible. Then the bean market took off. I think we’ll see an increase in corn acres, but it really depends on the next three months. We’ll be up an additional 1 million to 2 million acres, but to plant significantly more corn acres is going to require more capital improvement or investment. Right now given current trade issues, farmers are not in the mood to make any major capital investments. I think everybody’s going to be stingy with their money for a while until they get a little more confidence the trade war is settled.”


Bill Biedermann
Bill Biedermann
AgMarket.Net

Price Pressure Likely in 2020

“Our initial corn numbers are at 96 million acres. That’s a 6-million-acre increase pulled from the 10 million or so sitting in prevent plant. If we do reach our estimate, you’re looking at a carryover that would jump from 1.5 billion to 2.5 billion bushels. The carryover increase is going to be massively significant no matter how you look at it.”


Bryan Doherty
Bryan Doherty
Total Farm
Marketing

Ratios Still Favor Balance

“If farmers have enough time, and that’s been key the past couple of years, it’s possible to reach 100 million acres. There’s a lot of time between now and when farmers really have to decide, as well as price movement and what happens in the Southern Hemisphere. Currently, the ratio of November soybeans divided by December corn futures still favors corn. The ratio is about 2.4. Usually, when the price of beans is 2.5 times that of corn, we see more acres shift toward soybeans.”


Arlan Suderman
Arlan Suderman
INTL FC Stone

A Trade Deal Could Buy Acres

“We could plant 100 million acres of corn next year, but I do not expect it at this point. I think we’re probably looking at bringing those prevent plant acres back and adding to both corn and soybeans in 2020. The current price relationship would suggest both of them equally gaining, which would pull corn acres up to around 95 million. Soybeans could certainly jump back toward the mid to upper 80s. There’s a lot of unknowns yet and the biggest is the China trade deal. If in fact we would get corn, ethanol and DDGs in a trade deal, then suddenly we would realize the world corn balance sheet is tighter than what the market is currently trading. It just needs that type of incentive to see a spark.”