SOYBEAN futures soared, and corn futures tanked in the immediate aftermath of the United States Department of Agriculture delivering some extremely surprising numbers to the market on Friday, revealing a significant swing in the US row-crop plantings to corn at the expense of soybeans.
The USDA’s annual Planted Acreage Estimates report pegged the corn area 2.23Mha, or 6.2pc higher year on year at 38.08Mha. This is the third highest since 1944 and the highest since 2013. The estimate is 2.3pc higher than the department’s March Prospective Plantings report and represents the largest increase in the corn area between the March and June reports since 2007.
By contrast, it estimated the area planted to soybeans at 33.79 million hectares (Mha), 1.6Mha or 4.5pc lower than in 2022, but still the fifth-largest planted area on record. The forecast is 4.6pc lower than the March Prospective Plantings report. The average trade guess was 35.49Mha, so it came in a whopping 1.7Mha lower: a big miss!
A sharp dip in soybean futures prices, which commenced in mid-April and continued through May, appears to have led to the area shift to corn. Farmers kept planting their swing area to corn all the way through May rather than switching to soybeans when prices started to fall. However, the area expected to be planted to corn and soybeans combined has decreased by 770,000ha, reflecting the impact of an extremely dry spring and early summer.
According to the USDA, farmers still had 1Mha of corn and 3.33Mha of soybeans to plant as of June 1, down from 1.63Mha and 6.4Mha respectively at the same time in 2022. Much of the unplanted soybean number would broadly reflect the intended double-crop area, which will be seeded after the winter wheat harvest has been completed.
Inventories down
The USDA also released its quarterly Grain Stocks report on Friday, providing estimates of on-farm and off-farm inventories as of June 1. Corn stocks hit their lowest level in nine years at 104Mt, 5.6pc lower than the same date last year. On-farm stocks, which make up 54pc of the total, were up 4.7pc, but off-farm stocks were 15.4pc lower. Soybean inventories came in 17.8pc lower year on year at 21.65Mt. While on-farm stocks were only down 2.6pc, off-farm stocks, which make up 54pc of the total, were 25.7pc lower than a year earlier.
Source: graincentral.com
Photo Credit: USDA
Categories: Illinois, Government & Policy