USDA Prospective Plantings & Quarterly Stocks

Market got two shocks on corn with intended acreage coming out a bit above even the highest expectations and stocks at the high end of the range as well. Most commentators agreed before the report that the market was going to be skeptical of the acreage estimates as there has been a lot of flooding and weather changes since March 1st. However, it was unable to shake off the acreage with the addition of the surprise in stocks. It is worth noting that the corn stocks are almost 300 million less than last year at this time even with our record yield last year. This is not the shot in the arm we wanted on corn but we still have a long way to go to get the crop planted and the weather so far has not been very helpful. We also have a record fund short that will have to be bought back. This is a setback, but only a temporary one.

Soybeans, cotton and wheat all came in below expectations on intended acres. Soybeans and wheat do not have a big story. Soybeans still need progress on trade with China to make a difference. Cotton was the biggest bullish surprise as acres came in well below expectations.