Soybeans also climb as wheat and sorghum head lower
Acreage shifts aren’t new, but this year’s 6-million-acre jump to 94.1 million planted corn acres from USDA took some by surprise. Soybeans gained 1 million acres to 83.6 million and held closer to market expectations.
“Corn got the double whammy in the June 30 reports,” explains Brian Grete, editor, Pro Farmer. “Acreage came in not only above expectations but above March intentions, and that really hammered the market. In addition, June 1 corn stocks also topped expectations.”
The stocks figure for corn totaled 4.72 billion bushels on June 1, up 6% from a year earlier. Soybean stocks ballooned 39% from a year ago to 870 million bushels.
Soybean acreage “did not come in as high as anticipated, though up from intentions,” Grete says. “The stocks number was generally neutral, maybe a little bit negative.”
Going forward, weather will be a major market mover, Grete says, though bears seem to have the advantage so far. “It’s going to be an uphill battle for bulls to get back on their feet,” he says.
Price Potential. Yield expectations will be another major driver of corn and soybean prices, adds Darrel Good, University of Illinois ag economist. Look to the Aug. 12, Sept. 12 and Oct. 12 reports from USDA for price guidance, as well as to the Sept. 30 Grain Stocks report. Monitor Argentina, which likely will plant more corn.
Recent volatility suggests a potentially large price range for both corn and soybeans, Good says. He anticipates December corn futures between $3 and $4, and November soybean futures between $9.50 and $11.50.
“The pace of consumption of both crops, in exports and domestic processing, will be marginally important,” Good says. “World events that affect the financial and currency markets will also impact corn and soybean prices.”
Hay Heads Higher. Runners-up in acreage gains included cotton by close to 1.5 million and all hay acres with a gain of 1.7 million. Alfalfa acres edged higher by approximately 300,000 acres.
“Overall alfalfa hay acres increased about 1.6% for alfalfa and about 3.1% for all hay acres,” says Shannon Neibergs, Washington State University Extension economist. “Western states’ alfalfa acres were up about 6%.”
Grain Declines. Several crops saw acreage declines. Wheat acres fell close to 4 million acres relative to a year ago, while stocks gained 30% to 981 million bushels. As of April, a farm price of $4.69 is projected for the 2016/17 marketing year by the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri.
Sorghum fell about 1.23 million acres to 7.22 million. A farm price of $3.23 is predicted for the 2016/17 marketing year, followed by a price of $3.36 in 2017/18.
How Planted Acreage Shifted
Corn led acreage gains in this year’s June 30 reports from USDA. Soybeans and cotton also climbed, while wheat and sorghum declined.