It was a limit up day for both corn and soybeans on Wednesday after the release of USDA’s Prospective Plantings report. Corn moved $0.25 higher and soybeans moved $0.70 higher following the report.
Market analyst John Zanker with Risk Management Commodities in Lafayette explains why the report was so bullish.
“The trade was expecting 93.2 million corn acres and we got 91.1. So, if you saw that corn acreage number first, you’re thinking, ‘Oh wow- we’re going to have bean acreage up around 91 or 92.’ Bean acreage came in at 87.6 and that was versus a trade guess of 90 million. We’ve set this thing upside down again and I think we’re going to see higher prices in the coming days.”
How high could the prices go?
“Well, we’re locked up the limit, which means that the trading limits go up 50%. So, we could have a $0.37 day in corn, but I don’t think we’re going to see that. I think we could add another 10-15 cents on Thursday. Soybeans locked up the limit. 150% would be $1.05. Again, I don’t see that happening, but I wouldn’t be shocked to add on another 25-30 cents.”
Hear my full interview with Zanker below.