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Corn, soybean markets hit ‘limit up’ on USDA’s lower-than-expected acreage

Soybean market hits its 70¢ limit up mark Wednesday.

U.S. farmers will plant lower corn and soybean acreage than the trade expected, according to the USDA.

As a result, the CME Group’s corn market hit its daily limit up (25¢) trading prices. 

At the close, the May corn futures settled up its daily limit of 25¢ at $5.64½.

July corn futures settled up its daily limit of 25¢ higher at $5.47½.

New crop December corn futures closed up its daily limit of 25¢ at $4.77½.

As a result, corn’s daily trade limits will expand to 40¢ tomorrow.
May soybean futures finished up its daily limit of 70¢ at $14.36½.

July soybean futures ended up its daily limit of 70¢ higher at $14.27½.

New crop November soybean futures settled up its daily limit of 70¢ at $12.56¾.

As a result, the soybean market’s daily limits will expand tomorrow to $1.05.

May wheat futures closed 16¢ higher at $6.18. 

May soymeal futures settled $25.00 short term higher at $423.20.

May soy oil futures closed 2.46¢ higher at 52.92¢ per pound.

In the outside markets, the NYMEX crude oil market is -1.33 lower (-2.20%) at $59.22. The U.S. dollar is lower, and the Dow Jones Industrials are 42 points higher (+0.13%) at 33,109 points.

Anything above 180.3 million acres breaks the 2017 total acreage record.

In its March Prospective Plantings Report Wednesday, the USDA pegged the 2021 U.S. corn acreage at 91.1 million, compared with the trade’s expectation of 93.2 million and the USDA’s previous estimate from the Outlook Forum in February of 92.0 million.

For soybeans, the USDA sees 2021 acreage at 87.6 million vs. the trade’s expectation of 89.9 million and the USDA’s Outlook Forum estimate of 90.0 million.

All wheat acreage is pegged at 46.6 million vs. the trade’s expectation of 44.97 million and the USDA’s Outlook Forum estimate of 45.0 million.

March 1 Grain Stocks

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

In its report, the USDA pegged the March 1, 2021, U.S. corn stocks at 7.7 billion bushels vs. the trade’s estimate of 7.76 billion bushels.

For soybeans, March 1 stocks totaled 1.56 billion bushels vs. the trade’s estimate of 1.54 billion bushels.

USDA sees U.S. wheat stocks, as of March 1, at 1.31 billion bushels vs. the trade’ estimate of 1.27 billion bushels.

Trade Response

Jack Scoville, PRICE Futures Group, says that the USDA released a wild report and that the uptrend is back.

“The stocks report was mostly in line with trade guesses, a little less in corn and a little bigger in wheat with soybeans dead-on guesses. Not much there. But the Prospective Plantings report was wild, much below trade guesses for corn, beans, and wheat,” Scoville says.  

“I’m not sure why the U.S. farmer is not going fencepost to fencepost, but he was not planning to when he was surveyed. Plus, there was a lot of prevent plant area last year that was expected to get planted this year. So, I am not sure I believe the numbers, but they are what we got and we have to ride with them. Limit up now and probably locked up for today. We could be higher tomorrow. Maybe we go down a bit tomorrow, only to go higher later. The uptrend is back,” Scoville says.

Jason Roose, U.S. Commodities, says that today’s USDA report is telling the story of tight stocks. 

“Grains are adding back price premium with a flurry, after today's all important USDA Acres and Stocks reports. The acres set the stage with less than anticipated acres for both corn and soybeans. Larger acres are felt to be needed with stocks at multiple-year lows, with a margin of error tight going into spring,” Roose says.  

Roose added, “Spring weather will be closely watched and will acres be added in with higher prices, and will exports stay competitive with a stronger dollar,” Roose says.

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