The Rural Voice, 2019-09, Page 67plant dates. The answer to this
question is simply that about
40 million U.S. corn acres were
planted throughout June, with an
estimated 25 million acres past June
10. Why would this occur? Well, in
order to receive the second
government Market Facilitation
Payment (MFP2) U.S. growers had
to plant a crop. There was great
incentive for producers to get this
corn in the ground. Whether or not
one agrees with these planted acreage
estimates we should recognize that
there will not be more clarity
provided until the October crop
production report.
Not only were acreage estimates a
surprise, but the USDA also
increased corn yields significantly
from the average guess. The average
trade guess for the report was 164.9
bushels per acre, while the USDA
reported a whopping 169.5 bushels
per acre. Again questions arise. With
so much corn planted so late in the
season is it practical to anticipate
yields this strong? It is reported that
good rains have recently fallen across
much of the corn belt and a lot of
crops are doing well. With the
lateness of the planted crop it is
supposed that these late rains are
beneficial to the developing crop.
This begs the following question: if
late rains benefit the crop because of
late development, shouldn’t the
market be more concerned about an
early end to the season with the
potential of an early frost?
Two things come to my mind in
attempting to answer this question.
First, the market will worry
about an early end to the season
when it needs to worry about such an
event. Currently the weather is
generally non-threatening and we
have quite a bit of time before a
frost is likely. Secondly, and possibly
more telling, is that some analysts
think we would need to see a
drop below 1.2 billion bushels
carryout in order to get a meaningful
increase in corn prices. Currently the
USDA forecast a carryout of almost
2.2 billion bushels. With this
scenario, as crazy as this sounds, the
U.S. could afford to lose more corn
bushels without major supply issues
arising. ◊
Markets
September 2019 63
1136 Bruce Road 86, LUCKNOW
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