After USDA's recent report indicated that more acres were going to be planted to corn than any time in the last 60 years, the corn market responded by softening significantly. Meanwhile, people have started to talk about why the eventual acreage will actually be less than projected.
For one thing, fertilizer costs are rising, which will encourage a shift. Meanwhile, the basis has narrowed between corn and other grains, which may keep some acreage shift from occurring. And, with wet conditions in parts of the Corn Belt, and wetter than normal conditions expected the next 30 days, some corn simply won't be planted on time. Those acres likely will shift back to soybeans as a result.
I've always believed in the saying that "rain makes grain," and that concern about too much moisture at planting time usually ends up to be a positive from a harvest standpoint. This year is somewhat unique in this regard, as most farmers are trying to plant significantly more acres to corn, with the same equipment and labor as in the past. This means the window for error has been reduced.
Still, the market continues to send the signal that the most profitable crop for 2007 is corn, so expect every bit of corn that can be planted to be planted.
-- Troy Marshall