Corn Acres Down Big in the Delta

Buried in USDA’s Prospective Plantings Report from late March is this little nugget. The three states with the largest percentage decline in corn acres….AR, LA, MS. Collectively the Delta is down 25% or 570k corn acres.

The big acreage winner is soybeans (up 310k acres) followed by cotton (+150k) and rice (+40k).

Delta farmers are the best at reacting to market signals, as they have so many crop options in front of them.

For those running grain assets in this region, it makes every crop year a new challenge.

This year, I’m watching out for the following:

1)        August barge freight won’t find a bid in the South.  Corn is an Aug/FH Sep harvest here.  Expect local feeders/elevators to chase the reduced supply.

2)        Bean harvest may skew a little earlier than normal.  With multiple crops and constant tropical moisture risk, harvest is a highwire balancing act in the Delta.  We may see growers plant a few more early maturing bean varieties to make sure their combine time is maxxed out while waiting on a big cotton crop to mature.

3)        Stronger harvest basis levels for corn and beans than recent years.  This is more about cheap futures, bigger futures carries, and El Niño helping river levels.  But for sure there will be less pressure on space this fall in the South.

This 3rd point is counter to what I hear from my Midwest friends. They are staring at large ending stocks held disproportionately by the farmer. I think we can both be right, with stronger Delta basis and weaker Midwest early harvest premiums. Looking forward to watching it play out.