USDA Shocks the Markets with 90 Million Corn Acre Estimate: Where do Corn and Soybean Prices Go From Here?
Markets Now Midday Markets and Report Analysis 3-28-24
USDA Report surprises the market with a bullish corn acreage number of 90 million acres, down 4.61 million from last year. Soybeans at 86.5 million, down 3 million from 2023. All wheat acreage was down from last year at 47.5 million, but above estimates. Quarterly stocks were bullish for corn coming in 80 million bushels below estimates at 8.35 billion bushels. Soybean stocks at 1.85 billion and wheat at 1.09 billion, both above estimates. Brian Splitt, AgMarket.Net, looks at what this mean for prices.
USDA is pegging U.S. corn acreage down 4.61 million acres from last year with Minnesota leading the losses at 700,000 acres and Missouri and Indiana both losing 350,000. Iowa, Illinois, Ohio and South Dakota were all down 300,000 corn acres. So that will mean a drop in yield as well.
Brian Splitt, AgMarket.Net, says, "The state-by-state numbers a lot of the decreases were in some of the major production areas and so not every acre is equal and so what we have lost year over year is a lot of our higher producing ground."Splitt says even 90 million acres of corn with near trendline yield is long term bearish. However, combine this with quarterly stocks coming in below estimates at 8.35 billion bushels and the report may change the trend of corn short term.
Splitt says, "It does change the narrative short term. That number when also combined with the stocks number which was lighter than expected by about 80 million bushels from the trade estimate. So, you had both working positive for corn. And if you just go back to look at history with this report, whether the report is bullish or bearish generally that trend will hold true for the next several weeks."
U.S. soybean acres will be up by nearly 3 million from last year and again increases were across most of the major production areas. North Dakota led the increase with 700,000 more acres, Missouri added 400,000 with Iowa and Illinois farmers each increasing soybean acres by 250,000.
However, Splitt says that was in line with expectations, while quarterly stocks were above last year and estimates.
He says, "So, hard to get too worked up either way on the soybean acreage number. Maybe the important thing for beans is stocks were a little bit bigger than expected by about 20 million bushels. So, nothing extremely material but that just speaks to the lack of export demand that we’ve had."
All wheat acreage was 168,000 acres higher than estimates at 47.5 million, but below last year by 2.1 million. Winter wheat was at 34.1 million acres but other spring wheat at 11.3 million and durum at 2.03 were both above trade guesses and last year by a combined 500,000 acres. Quarterly stocks were also higher for wheat at 1.09 billion bushels.
