With the Crop Progress report released June 10 and a Supply and Demand report on June 11, the past week has been busy. But perhaps the most important one is still to come at the end of June.
Jack Scoville of the Price Futures Group said the acreage report scheduled for June 28 is the next big market mover as traders plan ahead.
He said the June 11 Supply and Demand report was “more interesting than normal” as the USDA attempted to factor in some of the delayed plantings and conditions in the Midwest. Until it is determined exactly how many farmers opt for soybeans or prevent plant, the market is playing with educated guesses.
“There’s a pretty wide range of guesses on what the corn and bean plantings (were) going to be, but the fact of the matter is we are at the point where whatever is done in corn is done,” Scoville said. “We probably aren’t going to expand the acreage any more in a dramatic way.”
He said for many farmers it is cost-prohibitive to continue planting corn, which will drive more acreage to soybeans or prevent plant. With the “significant” amount of corn that is likely not to be planted this year, combined with a yield drag, the USDA could take a large number out of the total amount of bushels being harvested in the fall.
“There’s been a lot of talk there could be 5 or 6 million acres off, and (the USDA) could easily start there,” Scoville said. “I think at the end of the day, as far as the corn market goes, people are going to realize it’s going to be a short crop. That’s going to make inevitable adjustments to demand.”
On the trade front, the United States and Mexico tentatively agreed to a deal on immigration, meaning President Donald Trump’s threats of tariffs did not go into effect. While the agreement needs to be ratified and faces some opposition, the markets are less worried about an impact, Scoville said.
“I think Mexico is going to keep doing their business here, and I think that is positive news as a result of this,” Scoville said. “That’s a significant amount of grain, pork and beef. That’s fine for me. I think we are keeping the business intact with the Mexicans, which is very important, and whatever agreement that got made is what it was.”