Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Talk of acreage cut pulls corn out of tailspin

Twitter Linkedin

Expectations that the US will cut its estimate of corn acreages by 500,000 acres have fuelled a 5% rebound in corn prices from a 2009 low.

The US Department of Agriculture said it was to collect "updated information" on American corn plantings for an updated crop production report to be released on August 12.

With existing plantings estimates based on data collected in early June, before rain delayed sowings, many investors believe the USDA announcement will herald a reduction in its corn acreage figure.

Market talk

"People are saying that there will be a 500,000-acre cut in the next report," Brett Cooper, a trader at MF Global Australia, told

"That is what's moving the market."

Vic Lespinasse, analyst at, said the trim could be even more severe, with some talk of a 1m-acre cut although "history suggests" a reduction of no more than 900,000 acres.

"If one excludes the flood year of 1993 and the severe drought year of 1988, 900,000 acres is the largest acreage change the USDA has made from their end June acreage report to their August crop production report," he said.

The August 12 report "will almost certainly show lower corn acreage, by how much being the only question".

Chicago corn for September stood 17.75 cents higher at $3.25 ¾ a bushel in late trading in Chicago. New crop contracts showed comparable gains.

Corn on Wednesday closed at its lowest since December, and down 30% since the beginning of June.

Selling opportunity?

At the yield of 153.4 bushels per acre that the USDA is expecting, a reduction of 500,000 acres - equivalent to plantings in one of the smaller US corn states such as Maryland or South Carolina - would equate to a reduction of about 77m bushels in output.

However, Mr Cooper said he was "surprised" that corn, which closed on Wednesday at its lowest for seven months, had bounced so far, given that recent US weather had prompted talk of better yields.

"There is talk of yields of 160 [bushels per acre] plus," he said, adding that traders may come to view the current bounce as a selling opportunity.

By Mike Verdin

Twitter Linkedin
Related Stories

Abares lifts hopes for sugar futures, but cuts its cotton price forecast

A downgrade to Australia curtails an upgrade in world sugar output expectations. But for cotton, Abares ditches ideas of a global production deficit

Evening markets: Ags poop party lifting other commodities, shares

Wheat futures set another contract low, while arabica coffee hits its weakest close but one in 19 months, despite buying in other asset classes

Australia cuts wheat export hopes, pegs canola shipments at 7-year low

The country’s Abares bureau sees a dent to wheat shipment prospects from a smaller harvest, but lifts expectations for coarse grain exports

Hedge funds turn net bullish on ags - ahead of price drop to historic low

Speculators are wrong-footed in soymeal, in which they hike bullish bets just before a price tumble. But they fare better in cotton and cocoa
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069