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Senior Advisor

I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong.

I would still be interested in theories as to why: 1) producers backed off acres, 2) the trade got it so wrong.

Did producers take fright at the low gasoline (ethanol) demand, the real possibility of low prices, and just decide not to bother this year?  Does this mean the old rule about  "every acre will get planted" no longer applies?

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Honored Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

On fringe acres, prevent plant made sense on a million + acres.    But I get a kick out of all the bears that were short and now it`s THEIR turn to say how the "USDA lied".   And the bears like David Kruse that always have everything figured out are saying just that  Smiley Very Happy  

Good for `em to get their comeuppance.

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Veteran Contributor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

I don't think anybody backed off of anything,  I think the March number was nearly price control, total BS

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Honored Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

Why did farmers back off acres? The prospect of losing money based on USDA’s wild acreage and yield predictions was a pretty big reason. 

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Veteran Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

hay makes more money than corn. 

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Senior Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

Just some background facts.

The agency is operating under a secretary who blew the ERS up and scattered it to the wind for unwillingness to fabricate reports of the great economic benefits of tax cuts on rural America.

These are very dishonest people. Whether they can corrupt the reporting process, I don’t know.

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Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

Don’t think the farmers backed off at all.  Just another agency report inflated for suppressed prices.  Grease enough palms or the right ones keep the money flowing in the wrong hands.  Same story different year, nothing to see here folks.  When hay and alternative crops make more than corn it’s a tough sell on the corn king nonsense.  Shame everyone had to take the price hit for 5 months.

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Honored Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

It would seem that the trade only missed the report by 2 mil really. 1 mil in the dakotas didn't get planted. Another mil goes to hay or grass or hemp or peas or crp,crep,weep, etc.    So, 2 mil acres that many of us thought was over-reported the last few years. But, only 2 mil out of a total of 220 mil for the big 3 crops is really just statistical noise.

Farmers didn't let up. It is all about weather anyway. Always is once this report prints. It is always comical how the "trade- meaning chicago/newyork/dubai algo spec traders" over-reacts to statistical noise in these reports. 

The weather 8-14 day forecast on Sunday night will be huge. Easily can expect corn up 15 or down 15 I would think.

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Honored Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

A simple exercise.

Make a list of the top ten factors that influence the decision for crop acres.  ( profit potential, debt load, manpower, aging equipment, rotation,  ground conditions, season length,  etc...) what ever you make that decision with.

two things will not be in that list.   1. what usda prints in its scenario exercises....... and  2.  what the pundants and "trade" thinks.  Especially the repetitive bores that self promote.

Two here have said producers did not back off acres....... infire and Illini   I gotta agree with Time sort of , because i think the reduction may be quite a bit more... I dont think it was nearly enough.  I havent forgotten the pictures of unharvested corn in snow covered minnesota and the dakotas....and how much of the crop was being harvested after Thanksgiving (that is december).  I never doubted that 19 corn would get harvested, but I have had no doubt that land was not going to be ready for planting in 2020.  Nor were the farmers and fieldhands that fought through the northern nightmare of 2019 going to be pepped up to go whole hog in 20 not at the prices being offered in the north.  Those states should have been all of the 2 million or more.

Second issue....... flood losses in the next two states.... Nebraska and western Iowa and parts of Missouri & arkansas...    Just flipping the page on the calendar did not rectify that kind of damage (damage to some of the most productive areas of those states).  Should have been maybe another half a million acres that were not ready for 2020.  

Profitability......... next teir of states Kansas, Colo, Missouri, Okla, arkansas, Texas      This is longer growing season and crop choice country.  FSA may have had some influence here.... with the only important factor to acres that usda produces (and never changes).... loan rates... where cotton price support is far greater than corn or beans... some  no many view that as a safety factor issue for risk protection in a region where three or more replacement or replant options exist on crops that get planted in April.  Here in the SW-- I don't know of a young farmer who isnt trying something new or different since corn is solidly below COP and beans are looking at $7  this last winter.(not to mention whatever is going on in the herbicide / cupping leaves fiasco.(where beans raised in a hot house protection location cup all season long mysteriously)--- Cotton acres exploded this spring...... drought is turning many of them to disappointment but that does not get those acres back to expensive corn seed without moisture.  This region accounts for up to 2 million change. (not to mention that drought is taking lots of dry land corn acres to termination as I type.  The sw is turning into a massive mess..... irrigation is struggling........ we get half our rainfall in april and May normally (10+ inches)  Most of this area has had less than 1.5 inches in 6 months.  not to mention that June 8th day of 70-80mph north winds over a three state region.  Corn this week on irrigation is just now growing out of that beating.  Those losses are still not counted-----sorry this is too wordy....... so ...... 2020 is well on its way to being worse than 2011-2 and moving your way.  

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Trade gets it wrong........... "trade".... slang for (the herders who push the sheep to slaughter).  Because no one who is interviewed for a thought on futures price trends makes his money trading futures.  At best they get to watch what trades are being made.  But these days all they get to see is the rapid exchange of bids at computer speed......doesn't give you much to go on--- the reasons for the trades are well hidden, and valuable information.  I don't think "trade" ever gets it right and pass the responsibility diversion to usda, who isn't really doing anything other than trying to look busy(without having to move to the midwest).  Trade does the same as usda..... relies on being right half the time and bets most heavily bearish when they know COP is high in relationship to futures prices for the producer.  When they know that prices are most profitable they get bullish....... but not until futures prove the case....   They hedge for --"Those poor smucks will have to produce more to survive" -- and appear to be bearish for that reason alone.  They know nothing about supply and demand..... only whatever usda said ---this is the primary reason I have always said COP moves the market.  Not 50 years ago...... now.... in the technical age where we know everyones opinion and almost nothing of facts because monopoly buyers dont have to give out free information.

Rick will every acre get planted...... no.....  that has always been a myth .... and believed by those not in the business.

IMO..... acres planted is driven by weather and climate change. --- the top issue in the list..... and the weather is never perfect everywhere and global cooling has been driving the dakota problems for a couple of years.  It greatly affected the kansas wheat crop this year when first frost in October came early with a 15 degree first night.... and the last frost in late april came at 14 degrees.... both events damaged wheat.... but the 80 mph cold arctic blast on June 8th took 1/3 of the crop by shelling it to the ground.(temps dropped 50 degrees in 12 hours.) June the 8th  following a week of 100+ temps.  Those are facts.... I'll leave the political slant to you.  

Weather raised hell all over the corn belt (like the east in 2019-- i left out) all in the last 18 months yet politics holds our brains hostage........ even in DC and limits our ability to think new and different thoughts.   The floods last year were terrible and very destructive.  Yet our focus is on fake urban brick throwing competition and who can pout the loudest ---- lets move on or Amazon will be our only place to get an oil change. Smiley Happy

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Advisor

Re: I would still be interested in why: 1) producers backed off acres, 2) the trade got it so wrong

Good observations BA and SW etal,

Personally I backed off on corn acres, but then ended up with the same amount as one landlord we had dropped called up and begged us to plant the small field and gave us a sweet heart deal on it. 

I had everything I could plant, planted and replanted, but after the last flood I am not planting any July beans....I will let the crop insurance take the loss , if any, from here on out.

$8.75 soybeans and $3.50 corn will pay this year's bills when coupled with the trump dollars and I will keep a percent in reserve for the what ifs. not selling anything ahead either...will sit and wait for profitable prices, not just numbers that cash flow. All my equipment keeps wearing out and needs maintenance and you can't just "live off the depreciation" for very long.