Combined corn and soybean planted acres are expected to be up 4.8 million from 2020. That’s a big jump, just not as much as markets expected. Soybean planting intentions account for 4.5 million of the 4.8 million, with corn acres up just 325,000 from last year.
March 1 corn and soybean stocks were a mixed bag for the markets. Corn stocks were about 65 million bushels un-der expectations, while soybean stocks were 30 million bushels above expectations.
For corn, that’s close enough to call it a match. For soybeans, it says the 2020 soybean crop might have been underestimated by 20 million to 30 million bushels. If those soybeans are eventually added to the balance sheet, 2020/21 carryover could be as high as 145 million bushels.
Big Price Jumps
Both corn and soybean futures jumped their daily trading limits following the release of the March 31 Prospective Plantings and Grain Stocks reports.
For soybeans, 87.6 million acres was a big jump from 2020, but still 2.4 million acres shy of the average pre-report estimate. Given the tight supply, that was plenty of fuel for the 70¢ price rise.
Corn acres of 91.14 million looks too similar to 2020’s tally and was 2.1 million below industry expectations. Com-bined with the tightening supply situation, the 25¢ price jump in old- and new-crop corn futures was driven not only by fund buying, but also by a lack of selling interest from any segment in the corn market.
USDA’s first official look at the 2021/22 balance sheets comes May 12. The next opportunity for an acreage adjust-ment comes on June 30. That means the May and June Supply & Demand reports will incorporate these acres.
Focus Shifts To Demand
Harvested acres of corn will be close to 84.3 million with the 2021 corn crop likely projected at just over 15.1 billion bushels. Assuming usage from USDA’s Ag Outlook Forum projections, corn carryover at the end of the 2021/22 mar-keting year will likely be just south of 1.5 billion bushels. Some analysts see corn carryover falling to about 1.1 billion bushels in 2020/21 and holding close to that level in 2021/22.
Harvested soybean acres will be close to 86.7 million with the 2021 soybean crop projected at 4.4 billion bushels. Usage for 2020/21 is estimated at 4.57 billion bushels and carryover at 120 million bushels. Even if carryover climbs to 145 million bushels, it will take demand rationing to keep 2021/22 soybean carryover above 100 million bushels.
The supply-and-demand outlook already suggested profit potential into 2022/23 (not continuously high prices, but profit opportunities). If these planting intentions are correct, push the profit timeline out at least another year.
Read More
Where Did the Acres Go? A State-by-State Breakdown of USDA’s Prospective Planting Results
USDA Chief Economist Explains Surprises in March Acreage Report
