At the close on Wednesday, the markets built upon the momentum from Tuesday’s Grain Stocks and Acreage reports.
Rick Hollister, grain merchant with The Andersons in Hemlock, said that after trading sideways for a couple months, a positive reaction is a good change of perspective.
“It’s nice to see the markets be able to respond and at least get growers reinterested or reengaged in what we can do from a marketing standpoint,” said Hollister. “Other than last year when we didn’t get the crop planted in the U.S., I think this 5 million acre decrease is the biggest drop from our [March] intentions to our June update that we’ve seen. It’s good to see the markets respond to that.”
There are 200,000 fewer planted acres of corn this year in Michigan compared to 2019, and that’s considering all of 2019’s prevent plant acres. Hollister is already looking ahead to the World Agricultural Supply and Demand Estimates (WASDE) that will be released July 10 to see how USDA adjusts.
“That should knock us down a fair amount on our ending stocks projections for the end of this new crop that’s in the field now,” he said.
With soybean acreage being fairly flat, Hollister isn’t so sure how that 200,000 acres will be split, especially with wheat acres being their lowest since 1919.
As for corn stocks, June 1, 2020 was less than a percentage point higher than they were last year. That’s factoring in the demand shake up with COVID-19 and ethanol production being cut in half. Hollister said that shows we didn’t grow as much corn in 2019 as expected.
“The cut in demand we saw was very severe in the spring, so the two have offset each other and left us right about the same with a few extra stocks of corn left over as of June 1,” he said.
Hollister talks about crop conditions and USMCA going into effect on Michigan Ag Today in the player above.