Higher corn acres combined with a big soybean stocks number combined for a bearish USDA report day Friday, according to Joe Vaclavik of Standard Grain.
“This report is really not constructive for anything,” Vaclavik told AgDay TV host Clinton Griffiths.
USDA set corn planting intentions at 92.8 million acres.
“Is it totally surprising that farmers intend to plant 92.8 million acres of corn?” Vaclavik asked. “No. I mean, farmers have every incentive in the world here to switch out of soybeans and into corn this year. The question now that we’ve got the numbers in front of us is, is it feasible?”
Despite the challenges of record flooding in Nebraska and elsewhere and remaining snowpack in the north, Vaclavik said it’s not too late to hit that corn intentions number.
“I’m not going to say it’s impossible to plant 92.8 million acres of corn,” Vaclavik said. “I think that anything’s possible. You could see a change in the weather pattern… If I had to guess, I would say that the corn number probably comes down a little bit from this, but you can’t tell for sure.”
On the soybean side of the ledger, the bad news comes from USDA’s Quarterly Grain Stocks report which pegged soybeans at 2.72 billion bushels.
“(Soybean) stocks are 29% above a year ago,” Vaclavik said. “That is a massive, massive year-over-year increase. The fact that futures even still have a nine in front of them for new crop delivery, given that statistic, is actually pretty impressive.”
USDA estimated corn stocks at 8.6 billion bushels, down 3% from 2018.
Vaclavik notes that while flooding could impact crop production in 2019, it will also have a negative impact on demand.
“Flooding has hurt demand,” he said. “It knocked off ethanol production, it messed up infrastructure of the rail system, the river system. It probably hurt export shipments. If you’re to believe that a really huge amount of cattle were killed in Nebraska, it’s bad for feed demand. So, there were some negative implications there that, over the short term, probably outweigh any positive implications that the flooding may have on the market.”
While weather may ultimately have the last say in 2019 planting, Vaclavik said the takeaway message is that, if Mother Nature cooperates, farmers plan to put more corn in the ground this year, and more than the markets expected.
Additional AgWeb.com coverage of Friday's USDA reports: