USDA Reports Surprise Traders
The USDA’s quarterly U.S. seeded area and old-crop stocks reports, released on the last Friday of June, often surprise traders, and this year was no exception. Analysts’ estimates fell short of USDA’s projections, particularly regarding acreage.
Increased Corn Acreage, Decreased Soybeans and Wheat
Despite high inventories and low prices, U.S. farmers increased corn acreage while decreasing soybean and wheat acreage. The market had anticipated more acreage under high-margin crops.
Corn Acreage Forecast
The National Agricultural Statistics Service (NASS) of the USDA estimates that 91.475 million acres of corn will be planted in 2024. This is an increase from previous years (94.6 million acres in 2023, 88.6 million acres in 2022, and 93.3 million acres in 2021). The new estimate exceeds both the March and June forecasts from the World Agricultural Supply and Demand Estimates (WASDE) by 1.5 million acres and the average analyst estimate of 90.35 million acres by 1.1 million acres. As of June 16, 3.356 million acres remained unseeded, the second highest since the report’s inception in 2020.
Soybean and Wheat Acreage Forecasts
Soybean acreage is estimated at 86.1 million acres, which is below the March and June forecasts by 0.4 million acres. Analysts had expected an increase to 86.75 million acres. Wheat planting area is projected to be 47.24 million acres, 0.25 million acres lower than March and June forecasts, while analysts had anticipated an increase to 47.67 million acres.
Stock Levels
As of June 1, the stocks of the old harvest in the USA are:
- Corn: 126.8 million tons (up from 104.3 million tons in 2023, 110.4 million tons in 2022, and 104.4 million tons in 2021). Analysts had estimated 123.8 million tons.
- Soybeans: 35.64 million tons (up from 21.66 million tons in 2023, 26.4 million tons in 2022, and 20.9 million tons in 2021). Analysts had estimated 26.2 million tons.
- Wheat: 19.1 million tons (up from 15.5 million tons in 2023). Analysts had estimated 18.6 million tons.
Market Reactions
The prices of soybeans and wheat remained relatively stable in response to the reports, while corn prices fell by 3%. On the Chicago exchange, futures prices declined:
- July corn futures: Down 4.2% to $156.5/t (down 11.7% for the month, $218.3/t last year)
- November corn futures: Down 3.2% to $165.8/t (down 10% for the month, $194.8/t last year)
- July soybean futures: Down 0.1% to $423/t (down 3% for the month, $572.2/t last year)
- November soybean futures: Down 0.1% to $405.7/t (down 5.4% for the month, $493.6/t last year)
The USDA’s latest forecasts highlight the dynamic nature of U.S. agriculture, with significant shifts in planting decisions and stock levels. As farmers and traders adapt to these changes, monitoring market trends and USDA reports will be crucial for making informed decisions in the upcoming agricultural seasons.