USDA’s March 31 Prospective Plantings report came with some shockers as farmers revealed their planting plans this year. Despite the higher than expected soybean acreage numbers, some analysts say the soybean balance sheet is still tight.
USDA’s report Thursday showed:
- Corn acres at 89.5 million acres, down 4% from 2021
- Soybeans came in at 91 million, up 4% from 2021
- All wheat acreage number hit 47.4 million, up 1% from 2021
- Cotton saw the largest increase with acres at 12.2 million, up 9% from 2021
After the report, soybean prices sunk hard, as Bill Biedermann of AgMarket.net says the number was a shock to the trade.
“On soybeans, prices were sharply lower on a number that was really knee-buckling both in the acreage number, way at the top end of trade expectations, and indicating that even with just a trend line yield, we could have close to maybe 500 million bushel carryover,” he says. “But then the quarterly stocks number, when you look at what’s on farm and what’s in commercial storage, the numbers themselves are staggering. However, I have to say that the trade was already expecting a 340 million bushel increase from last year. So when you put it into that perspective, the stocks number was really only 28 million bushel greater than what we thought, but the headline of it was very negative.”
Read more: 2022 Planted Acres: Corn Down 4%, Soybeans Up 4%
Arlan Suderman of StoneX Group says while the soybean acreage number in the U.S. means supplies may not be as tight as some expected, the fact the soybean acreage number came in high added a major weight to soybean prices Thursday. And he says even with the potential for more soybean acres, Suderman thinks those acres are needed when you factor in global supplies.
“I’m not as bearish on soybeans. I don’t think we’ve fully accounted for the 35 million metric tons that have been lost from South America’s crop this year, I think we needed to see an increase closer to at least 90 million acres,” Suderman says. “So, we’ll absorb some of this. It is just not as tight as what we thought. I think we’re seeing a spreading between the markets right now, making the soybeans look worse. But overall, the market is trying to shift some acreage to from soybeans to corn. And if the weather’s good, that’s what typically happens anyway.”
When you look at USDA’s NASS findings by state, the biggest uptick in soybean acres is expected to happen in Illinois and Missouri. Those two states alone account for a 400,000 acre increase.
In corn, USDA’s NASS shows the biggest acreage losses could come from the “I-States,” as well as Kansas, Minnesota, Nebraska, North Dakota and Wisconsin. South Dakota farmers say they intend to plant a record number acres of corn this year.
Acreage Picture May Not Budge
With input availability issues already at play, Bob Utterback of Utterback Marketing doesn’t expect corn acres to budge much from USDA’ March 31 report findings this year.
“I think the acreage number on corn is probably closer than we really want it to be,” Utterback says. “If you look at Missouri cleared, Ohio, guys are getting a little inkling to get in the field, but I think we’re going to start seeing the weather become a primary influence on the market as we come into April. And it looks like we’re going to be a couple of weeks late. It’s still not going to have big impact on yields, as long as we don’t go from cold and wet to hot and dry. But I think you’re going to have a lot of impact on the basis behavior. And that August, September time period, we don’t have a lot of early corn coming off the market. So, there’s a lot of moving parts here”
Can’t Afford Weather Issues
While the market turns its focus to weather, commodity prices could be extremely sensitive to any weather issues this year. That’s as the Western Corn Belt is already battling extreme dryness that is eating into the crop production picture.
“In order to keep carry over above pipeline levels in corn, we’re going to need 180 bushel yield,” Biedermann says. “And that just gets us to the pipeline. We have a yield of 177 [bu. per acre], which is a record yield that we established last year, I’m showing carry over the book below 1 billion bushels. This is a problem, especially if we have a weather issue.”
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