US soy and corn crop planting forecasts defy markets expectations

By Jane Byrne

- Last updated on GMT

© GettyImages/fotokostic
© GettyImages/fotokostic

Related tags soybeans Corn CBOT

US corn and soybean prices on the Chicago Board of Trade (CBOT) bounced after the release of the prospective plantings report from the US Department of Agriculture (USDA) on Wednesday.

Corn planted area for all purposes in 2021 is estimated at 91.1m acres, up less than 1% or an increase of 325,000 acres from last year. Compared with last year, planted acreage is expected to be up or unchanged in 24 of the 48 estimating states, noted CRM Agri ​in a review.

"Markets were expecting a larger increase in planted corn area for harvest 2021, and following the report, grain markets bounced. While there is no certainty at this stage for 2021 US corn production, with planting yet to commence, is this really a bullish story for new crop corn, and where were the additional acres to come from? Last season, before the storms that ripped through the US destroying crops, with a fractionally smaller area, markets were in a bearish tone expecting a record crop. It is too early to be totally confident for next season, but with global markets now backing off from the week’s highs, was this report really a good reason for limit up prices?

"Further adding to the skepticism that this report is a highly bullish grain market catalyst were the grain stock numbers, with total US corn stocks only down 3% from last year," ​said Peter Collier, market analyst, CRM Agri.

Soybean planted area for 2021 is estimated at 87.6m acres, up 5% from last year. Compared with last year, planted acreage is up or unchanged in 23 of the 29 estimating states.

"The US Prospective Planting report​ for soy highlighted an increase in area, however, markets had been anticipating a larger increase in area, soybean markets gained a lot of support following the reports. However, like with corn, this is still a large area increase, and the question remains, where were all these additional acres to come from? Some farms will be able to react to market prices and increase or decrease areas, but a large proportion will be within a crop rotation, and with high grain as well as oilseed prices, the incentive was less clear cut. Looking ahead, the area is up, and at this stage relatively good growing conditions have to be expected, but the upcoming planting progress reports will be closely watched by a speculative market hunting for bullish news amid tight old crop stocks,"​ he told us.

All wheat planted area for 2021 is estimated at 46.4m acres, up 5% from 2020. This represents the fourth-lowest all wheat planted area since records began in 1919. The 2021 winter wheat planted area, at 33.1m acres, is up 9% from last year and up 3% from the previous estimate.

"The report's overall planted area for wheat was broadly in line with expectations, however, the winter wheat area did beat expectations. With a larger than expected area, and increasingly good conditions of winter wheat in the US, new crop pressure is likely to continue pressurizing wheat markets,"​ the analyst commented. 

Decreased soy stocks but corn reserves better than expected 

The USDA also released its US grain stocks​ estimates on Wednesday [March 31].

All wheat stored in all positions on March 1, 2021 totaled 1.31 billion bushels (35.8MT), down 7% from a year ago. On-farm stocks are estimated at 284 million bushels (7.7MT), down 16% from last March. Off-farm stocks, at 1.03 billion bushels (28MT), are down 4% from a year ago.

Corn stocks in all positions on March 1, 2021 totaled 7.70 billion bushels (195.6MT), down 3% from March 1, 2020. Of the total stocks, 4.04 billion bushels (102.5MT) were stored on farms, down 9% from a year earlier. Off-farm stocks, at 3.66 billion bushels (93.1MT), are up 5% from a year ago, according to the report.

Soybeans stored in all positions on March 1, 2021, totaled 1.56 billion bushels (42.6MT), down 31% from March 1, 2020, reported the USDA. Soybean stocks stored on farms are estimated at 594 million bushels (16.2MT), down 41% from a year ago. Off-farm stocks, at 970 million bushels (26.4MT), are down 22% from last March.

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