Despite grain prices being higher, the USDA is showing corn and soybean acres do not appear to be following suit.
In the June 30 acreage report, expectations for higher acres were not fully met. Corn was reported at 92.69 million acres, while soybeans were pegged at 87.56 million acres. The soybean acreage number was actually lower than the reported March number by 45,000 acres. Both marks were more than 1 million acres below the expectations set by traders, leading to massive gains in the grain trade that Wednesday.
“The acreage report provided some big surprises for U.S. corn and soybean plantings again this year,” Jerry Gidel of Midland Research said. “(Corn) was 1.1 million less than the trade average estimate. Trade overestimated U.S. bean seeding by 1.4 million acres — the third year in a row for this trend.”
Some of those gains were also spurred on by the ongoing drought conditions in the northwestern Midwest, leading to limit-up trade in the corn market and nearly $1 higher trade in soybeans June 30. With fewer-than-expected acres, Gidel said that makes the market more vulnerable to any further weather weakness.
“The balance of the U.S. growing season will be highly important to the acres being impacted by the current drought in the northwest Midwest,” he said. “Hold your remaining old-crop and keep new-crop sale at 20-25% at this time.”
With corn seeing a 1.55 million acre rise in the latest report, much of those gains were seen in Minnesota, North Dakota and South Dakota. Iowa, Nebraska and Missouri lost nearly 550,000 acres of corn since the March report.
The Midwest lost 300,000 acres of soybeans in this report. The rest of the United States gained 255,000 acres of soybeans.
While acreage didn’t follow analysts’ estimates, the quarterly stocks report from the USDA fell within their expectations. Gidel’s biggest takeaway was that feeding has been “better than expected” in both the wheat and corn markets. The same can be said of the soybean crop, which is having a steady crush pace.
“Export paces are suggesting no 2020 crop size change at this time,” Gidel said. “Bean stocks are continuing to follow their crush numbers.”