USDA’s forum projects growing area for corn

327

The traditional USDA’s forum took place last week, but the actual planting intention will not be announced until March 31, and until then markets will work on their own estimates.

Amid the various figures released at the USDA’s forum past week, the market ends up paying more attention to the estimate of the area to be planted in the United States for 2020. We must reflect that this estimate released at the forum is not derived from an effective survey amid producers in a broad and reliable context. This is an exercise by the USDA’s economic department to enable other supply and demand projections for each commodity. The only real number of planting intention that is valid from the market point of view is released on March 31 by the NASS, responsible for this type of research.

For corn and soybeans, USDA made an optimistic projection for planted area. In 2019 the corn area was projected at 92/93 million acres. Owing to rains, 89 million acres were planted. Now the USDA expects 94 million acres, which may be possible given the concern of local growers over the soybean market and the absence of positive effects of the trade agreement on the prices of this commodity. So, as the local product is concentrated on the corn crop, the expansion of area is a natural trend. If confirmed, prices of USD 4.00 a bushel for the second half of 2020 are high.