Prices for corn, wheat, and soybeans have dropped significantly according to the Agriculture Department. With price of corn per bushel expected to drop the most to the average price of $3.90, there will be reduced plantings. Wheat doesn't have a huge price drop, only dropping about 20 cents. Soybeans drop to $9.65 per bushel. Corn plantings are shown to be dropped by 1.5 million acres at that price, while soybeans plantings increase about 3 million acres. Author David Rogers speaks of how corn prices could even drop down to $3.65 which could cause an estimated 3.4 million acres drop. So at $3.90, it would drop from 93.5 million acres to 92 million, at $3.65 it would drop from 93.5 to 90.1 acres of corn being planted this year. The market being explained in this article is the Supply market. .
This article mainly focuses on corn, its shows that at lower prices, a smaller quantity will generally be supplied than at higher prices. Meaning that since the price of corn has dropped per bushel, the quantity of corn being produced is also dropping significantly. Since soybeans stayed at a fair price, and corn didn't, there is an increase in production of soybeans. This will cause a leftward shift in the supply curve due to the decreased amount that will be supplied. Which if the amount of corn produced this year is at an all-time low, prices of corn could rise the following year causing an increase in planting. Much of the article is based on price expectations, which is the main determinant to show it is part of the supply curve. Changes in price expectations of a product can affect a producer's current willingness to supply. So many farmers may withhold from the market part of corn, due to the expected drop in price. Farmers will switch some of their acres to soybeans, just to make themselves feel safe in the market, and not have to worry about any losses in profit when it comes to planting corn. .
Another determinant is dealing with the weather.
