Hubbs positive on corn prices
CHAMPAIGN – Regardless of what happens in early June, University of Illinois ag economist Todd Hubbs expects to see a large amount of unplanted corn acres.
He sees upside potential in corn but is not so friendly when it comes to soybean prices.
“If we lose quite a few acres of corn, I think you’ll see some strength in corn prices,” Hubbs explained.
A lack of U.S. corn plantings will hurt supply numbers but the country would need a significant production reduction for the world market to be impacted. There are big corn crops in South American this year and they have been exporting quite a bit of it.
“We are probably going to see a minimum of five million acres of prevent plant corn this year or it could be substantially higher which would put us producing one billion plus less bushels than USDA is projecting.”
Hubbs remains positive on corn since we could see a big expansion of soybean acres before the June acreage report comes out. It seems far-fetched to Hubbs that soybean acres may get a large amount of prevent plant, but that could come true based on the weather forecast for the next couple of weeks.
“With the trade fight, the loss of that export market, good crops in South America on soybeans and the potential for even higher supply this year, it’s not looking great for soybean prices,” he said.
Growers are facing many decision deadlines when it comes to taking prevent plant insurance coverage on corn. May 25 is the date for the Dakotas, Nebraska and parts of Minnesota. May 31 is the day for Iowa, Missouri and Kansas while June 5 is the date for most of Illinois.
“The record was about 3.6 million acres and that was in 2013,” Hubbs explained. “I think we are going to exceed that by quite a bit this year.”
For soybean prevent plant decisions, the date depends on where you are located. June 15 is the date for the northern part of Illinois with June 20 the day for the central and southern regions.
Hubbs acknowledges the difficult decisions behind taking prevent plant or trying to put a crop in the ground if possible. He suggests figuring out what type of payment you would receive under your insurance policy and examining what has already been spent on the crop.
“Planting this late, there is definitely the potential for a serious yield hit.”