According to the March 31 Prospective Plantings report, farmers intent to plant 5 million more acres of corn than they planted last year, which was far more than the market expected, according to ProFarmer editor Brian Grete in a ProFarmer Profit Briefing.
“That’s 550 million bushels of corn in the 2016/2017 marketing year that we didn’t anticipate,” said Pro Farmer Editorial Director Chip Flory. “It’s a complete game changer from what was anticipated.”
Grete and Flory agree that unfavorable weather for most of the growing season is the only way to bring the corn supply down to a “comfortable level.”
“That comfortable level would indicate $3.75 to $3.90 corn price,” Flory explained. “Now we’re trading at $3.50.”
Watch the ProFarmer Profit Briefing below:
Post-Report Acreage Shift?
Of course, the plantings report is based entirely on intentions, not actual plantings. On Tuesday, USDA's Crop Progress report indicated that no corn has been planted yet.
Flory said intentions can, and normally do, change. “Already there are guys talking about switching 5 to 10% of their corn acres to soybeans,” he said.
Grete agrees, but warns farmers that the shift won't guarantee better prices.
“In the grand scheme, we’re talking about 1 million to 3 million corn acres that could be shifted,” he said.
According to Grete, the potential for an upside swing is going to depend on weather and the big question: "Do we have favorable conditions for this growing season or not?" That’s what farmers across the country are asking themselves as they head to the field.