Where are the Acres? Analysts Say It's a Question the Market Will Ask Until June
USFR-RT1 4.1.21
USDA’s Planting Intentions report released Wednesday left some unanswered questions. At 91.1 million acres of corn and 87.6 million acres of soybeans, those acres that are unaccounted for didn’t all go to wheat, cotton or sorghum.
A state-by-state breakdown of the acreage report shows North Dakota farmers plan to increase corn acres by 69% over 2020, as fewer prevent plant acres could bring some of those some land back into play.
But even with the large increase in North Dakota, U.S. Farm Report analysts say there are still acres missing.
“When you see over 4.2 million acres not accounted for, you’ve got to think, where are those acres?” says Mark Gold of Top Third, a division of StoneX. “When beans didn't reach anywhere near 90 million acres, and corn was at 91, it's explosive, particularly when you've got the stocks as tight as they are right now.”
Gold says the report was a surprise to many, as commodity prices indicated acreage would come in higher.
“I was certainly thinking where prices are at today, we would see a fence post planting, and granted this is an intentions report. It's not the final number. But this is an awful low number. And it's hard to step in front of this, knowing that the funds have expanded position limits,” Gold adds.
So, where did the acres go? Chip Nellinger of Blue Reef Agri-Marketing says that question will linger.
“That's going to be the question the market asks itself for three months until the June acreage report,” says Nellinger. “As you look down every major crop segment, that's what you have to ask yourself: Where are all the acres at? And I just think that they will get revised at some point.”
Nellinger says with lower-than-expected acres, he thinks it raises the bar for production, as the U.S. will need every one of those acres planted this year.
“This is the number they're going off of, and it's explosively bullish,” says Nellinger. “It really sets the bar even that much higher—that we've got to get this crop in the ground in good shape, a good growing season, and raising big yields—or we're going to cut the carry out to frighteningly tight levels. And that's what the market’s going on. And until we find these acres back, which at the earliest is going to be the end of June, this is what the markets going to trade off of.”