The saga of the 2019 planting season continues. Extreme weather challenges, which started months ago, have caused a record-slow planting pace and huge questions about crop quality. As of June 23, USDA reports 96% of the nation’s corn and 85% of the nation’s soybeans are planted.
While planting is finally nearing the finish line, both the corn and soybean crops are behind in development. Just 89% of the corn and 71% of the country’s soybeans were emerged as of June 23. The historical averages for emergence in late June are 99% for corn and 91% for soybeans.
Around 60% of the corn crop has condition ratings of good or excellent. Last year, 77% of the crop received those ratings. For soybeans, just 54% is good or excellent, which compares to 73% last year.
On June 28, USDA will release the annual Acreage report. Historically, this report is a strong indicator of final planted acres. But, that’s not likely the case this year, says Joe Vaclavik, founder and president of Standard Grain.
“These surveys for acreage were taken during first two weeks of June, and I think only 67% of corn acres planted as of June 2,” he says. “So, I don't know how to report can possible be accurate in regards to acreage.”
Chip Flory, host of AgriTalk, agrees.
“USDA collected data until June 17, but a lot of that data was in before June 17,” he says. “I just have a feeling that [Friday’s report] is going to include ‘intentions’ to stick with corn. The market was telling producers to try to stick with corn. Therefore, if they were going to fill it out honestly, weren't they going to say, ‘I'm still going to try to plant corn.’”
In the March Prospective Plantings report, USDA forecast 92.8 million acres of corn and 84.6 million acres of soybeans. Earlier this month in the June World Agricultural Supply and Demand Estimates (WASDE) report, USDA took corn acres down to 89.8 million and barely lowered soybean acres.
Ahead of the report, Paul Georgy, president and CEO of Allendale, says analysts expect the acres to be adjusted to 86.66 million acres of corn and 84.35 million acres of soybeans.
The all wheat acres are predicted to be 45.65 million acres in Friday’s report, which compares to 45.8 million acres in the June WASDE report and 45.75 million acres in the Prospective Plantings report.
“Grain markets are mixed as traders place their bets in front of a busy wrap-up to the week tomorrow,” Georgy says.
Farmers should be prepared for some volatility on Friday morning, Vaclavik says. “The acreage numbers are not likely to be accurate, and tomorrow’s report is just the start of discovering what the real acres are.”
Todd Hubbs, University of Illinois agricultural economist, agrees tomorrow’s report may provide a weak indication of corn and soybean acreage this year. (Read his recent farmdoc Daily articles: Soybean Stocks and Acreage and Corn Acreage and Stocks.)
“Uncertainty about corn acreage looks to remain in place through the summer,” he says. “The June acreage estimate may indicate the scale of acreage shifts into soybeans but prevented plant acres may not be known until later in the year.”
Yet, Hubbs says, the reports could provide clues for the direction of prices.
“The implications for soybean prices contained in the Acreage report appears set to form expectations about prices moving forward,” he says.
For corn, weakening demand should not be a hindrance to a continued price rally since the supply situation is quite dismal, he adds.
“Strengthening corn basis and futures prices point to marketing strategies involving delayed pricing of the new crop,” Hubbs says. “Price objectives need to be set to take advantage of current corn market dynamics.”
Hubbs says it is essential for farmers to have a marketing strategy since supply shocks provide a limited time frame to take advantage of pricing opportunities. “The strategy probably should include plans for pricing some of the 2020 crop.”
Morning Market Audio 6/27/19 by Joe Vaclavik
Anticipation Mounts for Busy Friday by Paul Georgy