Be it mere coincidence or clear symbolism, the delightfully early and deliciously warm spring enjoyed by farmers and ranchers came to a stone-cold halt just days after the U.S. Department of Agriculture’s market-cracking March 30 Planting Intentions Report and the April 1 White House announcement of a U.S.-Korea free trade deal.
The ethanol-driven Planting Intoxication – er, Intentions – Report showed American farmers gung-ho, ga-ga and going for near-record corn acres and, given good weather, record corn production.
But end-of-March planting intentions are like April 1 baseball standings; dreams of a fast start, solid summer and championship October often fall victim to a cold April, June swoon or a September collapse.
Yes, 90.5 million acres is a lot of corn; in fact, 2 million more acres than any market seer predicted. And, yes, the buccaneers in Chicago futures pits made big coin in gutting prices for several days after the shockingly large report.
But those pirates will become bulls if any of those 90.5 million acres fail to get planted in the yet very wet, yet very cold five key corn-producing states of Illinois, Iowa, Nebraska, Minnesota and Indiana, where 55 percent of intended 2007 corn acres will go under the planter in the coming month.
Moreover, actual harvested acreage, estimated at 81 million acres to 82 million acres, will require average to above-average growing and harvesting weather to turn out a record 12.5 billion bushels-plus, the coming year’s expected corn demand.
The bottom line is clear: 2007/08 prices are far from being determined. March doesn’t make a corn crop; the months of April through October do, and grain prices will yo-yo – more up than down, I suspect, after the shock of the barn-burning March 30 report wears off – throughout the growing season.
Of course, I could be wrong. If I am, you can torch me with e-mails. Don’t bother to call, however, because if I’m wrong, I plan to disconnect my telephone.
Disconnected is the most accurate word to describe the hastily pasted together U.S.-Korean trade agreement announced by the White House April 1.
Although more than 10 months of yakking had yielded little progress between the two nations that did $75 billion in business last year, eight gassy days of near-around-the-clock talking suddenly brought the deal to a head April Fool’s Day.
And what a rotten deal it is for U.S. farmers and ranchers. No language in the proposed deal addresses the ban South Korea imposed on American beef since the 2003 discovery of the first “mad cow” in the U.S.
The ban keeps closed the third largest American beef export market, valued at $815 million in 2003, until
