New-crop corn futures prices could top $6/bu. if acreage remains at the level forecast in the March 31 USDA Prospective Plantings report and spring remains wet in the Corn Belt.
"Throw in rain—which will slow planting—and the next objective (for December Chicago Board of Trade corn) is $6.20/bu.," says Terry Roggensack, principal at The Hightower Report.
Factoring in a national yield estimate by USDA of 154.9 bushels, and production could be 12.203 billion bushels, leaving a stocks-to-use ratio of 4.9 percent, “which is extremely tight,” Roggensack says. He adds that “we’ll run out of corn if corn yields are not as high as the USDA projection—for instance if there is a repeat of last fall’s yield of 151.1.
USDA said in its Grain Stocks report, also released March 31, that corn stocks as of March 1 were 6.859 billion bushels, lower than analyst expectations.
Don Roose, president of U.S. Commodities termed the lower-than-expected planted acreage and grain stocks as “doubly bullish.”The drop in corn acres is largely due to the 18 percent increase in USDA’s estimated soybean acreage of 74.793 million acres, a level still under the record soybean acreage of 2006.