1. Agriculture World

US Corn Planted Area Estimated Lower, Soybean Area Pegged Slightly Higher

Abhijeet Banerjee
Abhijeet Banerjee

According to the June month’s Acreage and Quarterly Grain Stocks Reports, farmers in the US have planted lesser area in corn and a slightly higher area in soybeans versus previous year. The USDA (US Department of Agriculture)has estimated total corn and soybean acreage at 176 million versus its March estimate of 180.5 million. (Last report on acreage and grain stocks was released in the month of March)  

In its quarterly report, USDA has estimated the June 1 corn stocks at 5.22 billion bushels vs. the trade’s expectations of 4.95 billion bushels and last year’s 5.2 billion.For soybeans, June 1 stocks were pegged at 1.39 billion bushels vs. the trade’s estimate of 1.39 billion and last year’s 1.78 billion. On the other hand USDA estimated the June 1 wheat stocks at 1.04 billion bushels vs. the trade’s expectation of 987 million bushels and last year’s 1.08 billion. 

With respect to the acreage report the USDA pegged the U.S. corn plantings at 92.006 million vs. the trade’s expectation of 95.14 million and the USDA’s March estimate of 96.99 million.For soybeans, the USDA expects U.S. acreage at 83.82 million vs. the trade’s expectation of 84.83 million and the USDA’s March estimate of 83.51 million. Net acreage of US wheat was estimated at 44.2 million vs. the trade’s expectation of 44.72 million and the USDA’s March estimate of 44.66 million. From pricing perspective, since USDA report indicates a lower planting area, thereby participants now expect decline in production outlook, indicating scope for a rise in average price levels in coming months.  

Corn planted area stood at 92.0 million acres, which was below all trade estimates by a wide margin. Soybean planted area was up slightly from March, but not near to the trade expectations, and in fact below the expected numbers. All in all USDA report seems to raise hopes for a price rise in grain markets immediately in the short run since prices have already fallen in last few days, with market participants anticipating higher supply report.  

 For maize the USDA's estimate stood at 5.2 billion in stocks, which was 3.0 million more than the trade estimate.  Regarding soybeans, the market already expected higher sowing this season right after the March planted acreage report was released. Since demand for soybean is strong globally, prices in US markets are expected to remain more or less firm this month. The Crops/Stocks surveys are conducted in all states quarterly by the USDA and the surveys provide detailed estimates of crop acreage, yields and production, and quantities of grain and oilseeds stored on farms. Farm operations are selected from an area frame and a list frame to produce "multiple frame" estimates, to be incorporated in the quarterly report.

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