Chicago Board of Trade Market News
Outlook: The corn market could be fairing far worse given all of the headwinds. Argentina is dumping a lot of feed wheat into the market at the same time avian influenza is reducing a small amount of feed demand. Brazil has been receiving more favorable rains in the driest northeast part of the country, boosting corn prospects. Add in the continued fall in oil prices plus plummeting equity markets and it all seems rather depressing – yet corn has traded above the 20-day average at times despite all of the gloom.
The corn market might see a brief improvement in June given that the part of Argentina’s crop that was planted late is harvested then and all exporting must be completed by the end of that same month. Exporters there are worried about a squeeze play.
There are analysts on both sides of the question over what U.S. farmers will plant this spring:
More Soybeans: 1) Growing ending stocks and lower prices will discourage corn planted acres; and 2) bank financing is getting tighter and soybeans are cheaper to grow.
More Corn: 1) Lower planted winter wheat acres means more acres available for spring corn and soybeans; 2) the need for more cash flow will drive all acres upward; and 3) after two straight years of taking away acreage from corn, soybeans will have lost their attraction as rotation needs favor a tilt this time toward increased corn area.
The Farm Futures magazine survey of 1,550 farmers indicates soybean plantings will be down 500,000 acres from 2015, but corn planted area will rise by 1.5 million acres to 89.5 million. Sorghum acres will drop by 2.5 percent. In truth, all of this could change once the South American outcome becomes clearer.