How Long Can This Corn Rally Last?

Corn Market Outlook
Farm Journal ( Crops harvested from flooded fields are often unacceptable because of contamination. )

Given the rash of wet weather, corn planting continues to run significantly behind the five-year average with just 58% of the crop in the ground. Typically, 90% of the corn crop is planted nationwide. Soybeans are only 29% planted. Also, more than 30 percentage points behind the normal pace.   

Jim McCormick, with, recently told AgDay's Clinton Griffiths the government's latest guess of 92 million planted acres with an average yield of 176 is likely going to change.

"With the struggle we're having getting this crop in right now we think that there's no way the acres get planted," McCormick said. "Acres are actually going to be closer to 89.2 at the current forecast."

McCormick says planted acres is just one part of the equation.

"With this crop being planted so late, planting in June, you historically get a yield drag eight 9 to 10 bushels per acre," says McCormick. "The crop just doesn't have enough time to mature."

He says if we plant the crops this late, we may lose a lot of bushels. 

"A lot of people don't realize if we plant this crop this late, you're looking about 6 billion bushels of corn, that are actually not going to hit maturity until after the first frost date in the first week of October," says McCormick. 

Right now the government projects carryouts of 2.5 billion bushels.

"If we lower that yield to 167 [bushels per acre] and acreage down to 89.2 then you're looking at about a 1.1 billion carryout," says McCormick. "You're going to see a drastic change in the balance sheet with any kind of weather situation."

McCormick adds that the crop also needs to be harvested. 

"We're used to a harvested acre [number] of about 92%," says McCormick.  "In 1993, we only harvested a shade below 86% of the crop." 

Doing the math, he believes carryout could fall below a billion bushels without rationing any demand. 

"So what that means is the price of corn is going to have to go higher to slow down and ration demand," says McCormick. "It's just a matter how fast it'll go."