The USDA released its acreage report on the last Friday in June. I've been busy and I'm a huge procrastinator or I might have mentioned it here. The report showed a larger than expected increase in corn acreage this year. This was rather bearish for the corn market and the price of corn has dropped around $1/bushel in the past two weeks. It was pretty bullish for soybeans since they were the major crop replaced with corn. We aren't in a tight soybean market yet with a decent carryout expected.
Now the market only has weather to trade on for a month or better until the yield estimate start being released. Its starting to get dry in the eastern corn belt again which has helped out corn prices some this week. My feeling is that if the crops there were bad enough to drive the price up to $4.00/bushel in June than the bit of rain they got isn't going to be enough to help their crops out much. Where I am in NE Iowa, things look about as good as they ever have. Some of our corn might start tasseling next week which would be a week or two ahead of schedule. We are getting dry again, but it doesn't seem to be bad enough to hurt the corn yet. There is a chance of rain on Monday, so maybe that will be our break. If we keep getting moisture and it doesn't get too hot all summer, I think this may be this farms best year for corn yields.
Looking at the corn market, I think it will creep back up provided there are dry conditions somewhere to keep traders edgy. A lot of the added corn acres this year were marginal ground and they only planted corn because of the basis, so I think even with more acres than expected, we might not harvest all that much extra corn. Maybe I'll be surprised again, I certainly didn't think acerage increased that much.
Soybeans are probably the place to go long though, until they can buy a lot of acres in Brazil.
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