“Obviously it’s a big shock to the market,” Jack Scoville, analyst at The Price Futures Group, told Reuters.
In contrast, farmers planted 90.2 million acres of corn and 90.1 million acres of soybeans in 2017.
Ongoing Supply Glut
Back-to-back years of bumper crop harvests have led to an oversupply of grain crops, fueling a multi-year rout in prices and dragging farmer incomes lower. The USDA calculated that corn inventories were at 8.89 billion bushels and soybeans at 2.11 billion bushels, both records for the March 1 date and above average analyst forecasts. The government also recently revealed that farmer profits will dip to their lowest this year since 2006.
Commodity traders have also been anxious amidst trade war talks as China is said to be looking into the potential impact of trade restrictions. Chinese news outlets have criticized alleged dumping of U.S. production, but no single commodity has yet to be targeted. China is a large importer of U.S. soybean as the grain feeds an expanding hog herd and pork consumption.
For more news and strategy on the Agriculture market, visit our Agriculture category.