While a U.S. Department of Agriculture report shows Indiana farmers will see a much smaller corn and soybean crop this year, corn and wheat prices fell this week after that same report forecast higher national planting and production totals than earlier expected.
The monthly grain report released on Monday estimated 90 million acres of corn was planted, greater than market estimates of 87.7 million acres. Corn and soybeans are the primary commercial agricultural crop planted in the Wabash Valley and across Indiana and Illinois.
"Corn production nationally, [in terms of] both acres and yield, were up big over market expectations, and soybean yield was right in line, but acres [planted] were down," said Brad Jansen, area manager for Gavilon Grain in Terre Haute.
U.S. Corn production was pegged at 13.9 billion bushels, according to the USDA report, higher than market estimates of 13.1 bushels and a July estimate of 13.8 bushes.
Corn prices fell 6 percent Monday and were down another 4 percent Tuesday, Jansen said. Corn cash bid was trading Tuesday afternoon at $3.77 per bushel, down from $4.14 per bushel for the same time last week.
Soybeans were only down about 4 cents Tuesday afternoon, with a cash bid trading at $8.43 a bushel, but that is up from $8.21 a bushel last week due to the report's stating less acres planted, Jansen said.
Market traders had bet that record rainfall in the Midwest throughout the spring would weaken acreage.
"They (market traders) thought things were going to go up because acreage was going to go way down because of the rains and prevent plant would be up, so a lot of acres would not be planted, but much more got planted than what we thought," Jansen said.
Jansen said that shows farmers planted later into June than usual in an effort to meet eligibility for aid payments from the USDA.
"Prices were also higher at that time when farmers were planting late," Jansen said.
The USDA in July announced details for a $16 billion trade assistance package for farm operators, with $14.5 billion designated as direct payments to farmers in the form of market facilitation program payments to offset the financial losses incurred from the impacts of ongoing trade disputes with China and other countries.
The payments are based on a calculation of acreage planted. Farmers in Vigo County are to get $66 an acre. Payments range from $66 an acre to a high of $72 an acre in the Wabash Valley. However, only half of those payments are currently guaranteed.
In Indiana, the USDA report projects corn production to be down 4 percent compared to 2018 and soybean production down 19 percent from 2018.
The USDA's report expects 4.9 million acres of Hoosier corn, down from earlier projections of 5.4 million acres. The USDA reports 5.1 million acres of soybeans planted, down from 5.5 million forecast in March.