The outlook for corn prices is more positive because corn is likely to experience a significant downward supply shock. Not only will planted area be reduced, but the yields will also likely be significantly lower.

Suppose only 85 million acres of corn are planted, and yields fall to 170 bushels per acre. Adjusting for 92% harvested leaves a crop size of 13.3 billion bushels, down 1.7 billion bushels from the U.S. Department of Agriculture’s May production forecast. A similar production estimate can be obtained with 87.5 million acres planted and 165 bushel-per-acre yields. The 1.7 billion bushels of lost production would likely push the farm price up to $4.15 per bushel and corn prices at the Chicago Board of Trade to nearly $4.50 per bushel. Continued speculation on the production impacts from delayed planting will likely keep the market volatile and will likely present some marketing opportunities for those who have been able to plant this year. Market participants have already pushed the March 2020 corn futures above the $4.50-per-bushel level.

FAPRI projections as of March 2019