Why such a bearish report?
The trade underestimated the acreage starting point before some soggy fields were abandoned, and farmers did all they could to avoid low prevented-planting crop insurance payments to get the crop in.
That's what's behind today's surprisingly bearish crop acreage report, says Don Roose of U.S. Commodities in West Des Moines, Iowa.
"We probably started with more acres than the trade thought," he told Agriculture.com. "And the way crop insurance is structured, if it was possible, people planted corn."
Just a few minutes after the report, new crop (December) corn futures were down 22 cents a bushel and November beans were off by 10 cents; prices were trending down from that. Roose thinks wheat will be a bridge for feed needs between very tight stocks of old-crop corn and soybeans before harvest. "Positive old-crop numbers are negated by new crop because ending stocks are expected to grow to burdensome levels of corn and soybeans," Roose said.
Roose expects the next USDA projection of ending stocks in July to be over 2 billion bushels for 2013-14 corn carryout and over 300 million bushels for soybeans.
"Weather is now probably going to determine the price outlook from here forward," Roose said. "On weather rallies, people are probably going to want to sell."