The combines have started rolling in many fields, but the question of just how many acres—and bushels--of corn and soybeans that will be harvested this year is still being discussed.
With all the reports of drowned crops and prevent plant, “Everyone was concerned about ‘what is going to happen to the acres? What are the true acres?’” said Don Roose of U.S. Commodities, speaking on U.S. Farm Report.
Last week’s Farm Service Agency report finally provided some prevent plant numbers for the market to digest: 2.35 million acres for corn and 2.22 million acres for soybeans. Those are expected to be incorporated into USDA’s October World Agriculture Supply and Demand Estimates scheduled for release on Friday, Oct. 9.
“What it really says is that the acres are probably pretty close on corn,” said Roose. “You could even make an argument that the acres could go up slightly. ….So now what you’re really going to look at is: ‘What is the real yield out here?’ The acres are probably going to keep adjusting all the way to January.”
Joe Vaclavik of Standard Grain agreed. “I don’t think the vast majority of the trade or analysts at least are looking for a major, major shift,” he said, also speaking on U.S. Farm Report. As far as acreage, “I think we’ve got it down for the most part.”
Watch their discussion on U.S. Farm Report with Tyne Morgan here:
With the market relatively comfortable with the acreage situation, the next big unknown is yield. Just as they wondered how many soggy fields would actually get planted this spring, the trade is now considering what yield might be, given the variation between crop conditions in the eastern versus the western Corn Belt.
“It’s been an interesting year in that we started very wet,” Vaclavik said. “We then turned very dry in some areas. I have a feeling that it’s going to be awhile—another few months, another few reports—before we really get a good handle on this thing. I think there is going to be a lot of adjustments.”
How can farmers take advantage of that situation? Very carefully.
“This is historically a very negative time of year for row-crop markets. The corn and soybean markets often have a very difficult time rallying during harvest, so you’ve got to assume as a farmer (that) there is plenty of risk here moving forward,” Vaclavik cautioned. “The yield debate is one thing, but it’s really not going to help you out on the marketing side.”
Instead, look to your own operation and craft a strategy that gives you a chance to grab some upside benefit from all that stored grain.
“It’s a tough time to be making real tight marketing sales at the present time, because we’re probably three-fourths of the way down from a harvest low,” Roose warned. “What you’re really trying to do is give yourself a chance to get some kind of bounce back. Use some option strategies. Try and take advantage of your storage. Make sure you get a return-on-investment on storage. Don’t just treat it as a speculative vehicle.”
Do you think we've hit harvest lows in corn? Why or why not? Let us know in the comments.