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Corn reacts wildly to June Acreage report

Photo courtesy of the U.S. Department of Agriculture (USDA)

The moment we have all been waiting for: The release of the U.S. Department of Agriculture’s (USDA) Quarterly Grain Stocks and Acreage reports.

A market analyst shares what came from these reports.

The June Acreage report weighed on the corn market Friday. Brian Grossman, market strategist with Zaner Ag Hedge, says the Acreage report did the most damage. He believes the report’s data draws similar results to playing darts in a dark room. 

“The USDA threw their dart and it landed on a big 91.6 million acres of corn. I personally do not believe that number. But, it is the number the speculative crowd is trading and eating up,” Grossman said. 

Corn reacted wildly to the news, eventually reaching limit down.

“Corn, in the first two minutes, traded up 15 cents. (Then) at one point, down 10 cents. A lot of action in the first couple minutes,” Grossman said. 

The Quarterly Grain Stocks report was viewed as supportive. 

“Corn coming in at 5.202 billion bushels. Two-hundred-million less than what I was expecting, so that is a positive aspect. We have more demand, or less corn throughout this quarter, in some combination,” Grossman said. “Soybeans also coming in on the low end, so that is a bit supportive.”

Grossman says the key takeaway is: The Planted Acreage report is nowhere near accurate. He encourages producers not to panic.

“The general consensus is quickly going to be the acreage report is nowhere near accurate. We were saying earlier it’s nothing more than Prospective Plantings 2.0,” Grossman said. “Don’t make any panic decisions. Let’s get to next week. We have a new week, a new month and holiday week. A lot of things will happen.”

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