Tuesday, August 13, 2019

USDA says prevented planting set to hit a record high this year because of wet weather; corn futures plummet

Farmers were unable to plant a record 19 million acres because of rain and flooding earlier this year, according to the Farm Service Agency's first estimate of 2019 prevented planting, released Monday.

That tallies up to about 11.2 million acres of corn, 4.35 million acres of soybeans, and 2.2 million acres of wheat, the Department of Agriculture agency said that. By comparison, prevented planting last year was about 2 million acres, Ryan McCrimmon reports for Politico's "Morning Agriculture."

"USDA also released its monthly World Agricultural Supply and Demand Estimates — which immediately sent corn futures prices lower. The department surprised traders by raising its forecast for corn production to 13.9 billion bushels and corn yields to 169.5 bushels per acre. Meanwhile, it lowered its estimate of 2019-20 corn exports by 100 million bushels," McCrimmon reports. "The plummet in corn prices was the steepest drop in six years, and it sent ripples through the commodity markets . . . Some market watchers saw the higher-than-expected corn estimates as proof that farmers were planting more crops than they normally would, given the poor weather conditions, in order to get a bigger paycheck under USDA’s trade relief program."

Poultry shares increased because of the prospect of cheaper animal feed, but stocks for farming equipment makers went down, as traders anticipated lower farm income and fewer purchases of farming machinery. McCrimmon reports.

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