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315506

USDA makes little changes to acres, corn hits limit up

Soybeans closed 90¢ higher Wednesday.

The U.S. farmers planted fewer corn and soybean acres than the trade expected, according to the USDA.

As a result, the CME Group’s corn market jumped 40¢, its daily limit up, soybean rocketed 85¢ up, and wheat surged 22¢ higher.

At the close, the July corn futures finished 25 1/2¢ higher at $7.20. New crop September futures finished at its daily limit up of 40¢ higher at $5.99 1/4. December corn futures closed at its daily limit up of 40¢ at $5.88 3/4. 
 
July soybean futures closed 90 1/4¢ higher at $14.50. 

August soybean futures finished 90¢ higher at $14.30 3/4. New crop November soybean futures ended 86 1/2¢ higher at $13.99.

Sept. wheat futures closed 33 1/4¢ higher at $6.79 1/4. 

Aug. soymeal futures finished $27.10 per short ton higher at $377.50.

Aug. soy oil futures closed $1.26 higher at 63.42¢ per pound.

In the outside markets, the NYMEX crude oil market is +0.63 higher (+0.86%) at $73.61. The U.S. dollar is higher, and the Dow Jones Industrials are 184 points higher (+0.54%) at 34,476 points.

A big acreage number was built into the market, but the USDA didn’t push out those big numbers.
 
Anything above 180.3 million acres breaks the 2017 total acreage record.

READ MORE: Weather could trump USDA data, analyst says

In its June Prospective Plantings Report Wednesday, the USDA pegged the 2021 U.S. corn acreage at 92.7 million, compared with the trade’s expectation of 93.7 million and the USDA’s previous estimate from March at 91.14.

For soybeans, the USDA sees 2021 acreage at 87.6 million vs. the trade’s expectation of 89.0 million and the USDA’s March estimate of 87.6 million.

Spring wheat acreage is pegged at 11.58 million vs. the trade’s expectation of 11.4 million and the USDA’s March estimate of 11.74 million.

June 1 Grain Stocks

The USDA estimates both the amount of grain stocks on and off-farm as of June 1.

In its report, the USDA pegged the June 1, 2021, U.S. corn stocks at 4.112 billion bushels vs. the trade’s estimate of 4.2 billion bushels.

For soybeans, June 1 stocks totaled 766 million bushels vs. the trade’s estimate of 787 million bushels.

READ MORE: Average corn, soybean crops could be the 2021 story, analyst says

USDA sees U.S. wheat stocks, as of June 1, at 843 million bushels vs. the trade’s estimate of 859 million bushels.

Trade Reaction

Peter J. Meyer, S&P Global Platts, head of grain and oilseed analytics, says that today’s USDA report indicates one thing. 

“Plain and simple, there are not enough soybean acres. Full stop,” Meyer says.  

Sal Gilbert, Teucrium Trading, agrees that the government served up surprises.

“The numbers surprised in beans the most, with planted acreage lower than all surveyed trade estimates, but corn prices surged due to the expected dramatic change in the corn balance sheet and less than optimal July forecasts for the maturing corn crop. Soybeans have more time and a better chance to improve the crop than corn, which is why corn is the focus today,” Gilbertie says.

Jason Roose, U.S. Commodities, says to prepare for continued swings in the grain markets.

“Volatility will be the word for the grain market in 2021, with uncertainty in the weather and grain supplies already tight. This year's stocks and acres report is going to give an indication on future supplies. With corn acres up 2% and bean acres up 5%, both under trade estimates and in drought areas, both the stocks for corn and beans were under trade estimate which were bullish to the trade. 

Roose added, "All eyes will be on the weather as a good yield will be needed to avoid the supplies getting tighter," Roose says. 

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