AgDay TV Markets Now: Rich Nelson Explains if USDA's Corn and Soybean Yield Goals Are Possible with the 2024 Forecast?
AgDay TV Markets Now 02/20/24
At last week's USDA Ag Outlook Forum in Washington D.C. the agency released its projections for acreage, yield, production and ending stocks for all crop in 2024. Cheif economist Seth Meyer says they are expecting 91 million acres of corn, which is down over 3.5 million from 2023 with a nearly 4 million acre increase in soybeans.
After the resiliency of the U.S. crop amidst a major drought in 2023, Meyer says USDA started their yield projections for the new growing season at record levels.
However, can farmers achieve USDA's record yield projection of 181 bushels per acre on corn and 52 bushels per acre on soybeans with the latest weather outlook for the 2024 growing season?
Rich Nelson, Allendale, Inc. says that is a big question heading into the new growing season as the weather and drought outlooks for the 2024 planting and growing seasons were also released last week. They indicated that a major portion of the western corn belt will continue to see drought persist.
Nelson says that may make it difficult to reach those lofty yield goals and it will take a major weather scare to get the funds to exit or take profits on their near record short position in the grain and oilseed complex.
However, Nelson is optimistic the short selling by speculators may be slowing down. "Since February 5th we have seen open interest decline. So, this last leg of lower corn prices is actually from people getting out. So, that's a good starting point for a discussion of a low in these days ahead here for corn."
He doesn't have the same good news for soybeans though as open interest has been rising all the way through the end of last week, suggesting that traders are confidently still selling soybeans.
