Farmers shifted acres to soybeans from corn and wheat according to the planting data released Friday by the U.S. Department of Agriculture (USDA), but soybean prices surged after the numbers were released as the total area for that crop was less than what many in the trade expected.
Wheat futures also rose as USDA’s wheat acreage was shy of trade forecasts, with the spring wheat acreage under all forecasts in a Reuters’ survey.
Also on Friday was USDA quarterly grain stocks, which were up from a year ago for all three crops, as expected, but the soybean supply of 963 million as of June 1 was under average forecasts. Corn and wheat stocks of 5.23 billion and 1.18 billion, respectively, were on the high side of trade estimates.
“Today’s reports continue the recent history of surprises at the end of June,” said Bryce Knorr, Farm Futures senior grain analyst. “Soybeans got a boost on both acreage and stocks, but not enough to tighten the balance sheet if yields hold up. So far, the crop is looking in pretty good shape but July and August weather will be crucial.”
USDA said farmers planted 89.5 million acres of soybeans, while traders in the Reuters poll on average expected 89.75 million and Farm Futures expected 90.10 million. A year ago, they planted 83.433 million.
The corn acreage of nearly 90.9 million was on the high side of trade forecasts and above the March estimate of 89.996 million. A year ago, farmers planted 94 million.
All-wheat acreage of 45.66 million was shy of nearly all trade forecasts including Farm Futures’ 46.15 million, with a larger-than-expected reduction in spring wheat. Spring wheat acreage of 10.9 million, compared with the 11.2 million average forecast and the 11.31 million USDA had in March. A year ago, farmers planted 11.6 million.
“USDA’s corn numbers were bearish on both acreage and stocks, suggesting lower than anticipated feed usage this spring,” said Knorr. “The combination could add 300 million bushels or more to supplies in the coming year, increasing the burden for weather as the only card left for bulls. Basis will weaken on any rallies now as growers get more desperate about liquidating inventory, especially if pollination goes well.”
In midday trading, CBOT soybean futures were trading nearly 30 cents higher for the day, winter wheat was up about 27 cents while Minneapolis spring wheat was up 35 to 43 cents. Corn futures were about 7 cents higher for the day.