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USDA prints U.S. corn acreage estimate at 97.0 million Tuesday

USDA drops corn, soybean stocks.

INDIANOLA, Iowa — U.S. farmers will plant a lot more corn and soybeans than last year, according to the USDA.

Perhaps the biggest surprise in today’s USDA’s reports came in the larger than expected corn acreage estimate of 97.0 million.

As a result, the CME Group’s farm markets reacted mixed to the reports.

At the close, the May corn futures finished ½¢ lower at $3.40¾. July corn futures closed 1½¢ lower at $3.46.
 
May soybean futures settled 3¾¢ higher at $8.86. July soybean futures ended 3¢ higher at $8.81.

May wheat futures closed ¾¢ lower at $5.68¾. 

May soymeal futures ended $4.00 per short ton lower at $321.50. May soy oil futures closed 0.09¢ higher at 28.74¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.32 per barrel higher at a $21.02, the U.S. dollar is higher, and the Dow Jones Industrials are 390 points lower.

USDA Acreage

In its report, the USDA pegged the U.S. 2020 corn acreage at 97.0 million vs. the trade’s expectations of 94.32 million, about what the USDA forecasted in its February Ag Outlook Forum, and way above the USDA’s final estimate of acreage in 2019 at 89.7 million.

For soybeans, the USDA sees the U.S. 2020 acreage at 83.5 million vs. the trade’s expectation of 84.8 million and the USDA’s February Ag Outlook estimate of 85.0 million and the USDA’s final estimate in 2019 at 76.1 million.

For wheat, the USDA pegged the U.S. 2020 spring wheat acres at 12.6 million compared with the trade’s expectation of 13.0 million.

Quarterly Grain Stocks

On Tuesday, the USDA released updated estimates on U.S. Quarterly Grain Stocks as of March 1.

For corn, U.S. March 1 stocks were estimated at 7.95 billion bushels vs. the trade’s expectation of 8.12 billion bushels.

For soybeans, U.S. stocks, as of March 1, were pegged at 2.25 billion bushels vs. the trade’s expectations of 2.24 billion.

The U.S. wheat stocks were estimated at 1.14 billion bushels vs. the trade’s expectations of 1.43 billion.

Trade Response

Sal Gilbertie, Teucrium Trading, says that today’s USDA reports are being viewed with some skepticism, which is not surprising given how fast fundamentals have changed since the report was compiled.

“Corn acres are viewed as too high, wheat acres as too low, and the corn disappearance numbers, which at first glance seem slightly supportive, can’t be relied upon at all given the current state of ethanol margins. Markets clearly expect wheat acres to increase to at least last year’s levels, and beans could surprise and take far more acres from corn than most are expecting right now,” Gilbertie says.

Jason Roose, U.S. Commodities, says that today’s reports raise a question: Will the weather or prices change the producer planting decisions? 

“The well-anticipated spring stocks and prospective planting numbers were as big as advertised, with soybean acres and stock numbers considered neutral even with stocks numbers down nearly 17% vs. last year. Corn acres were 97 mln aces, considerably higher, almost 3 mln acres, than early trade estimates. This is negative, but stocks were lowered to 7.95 bln, which is a larger drop than anticipated. All these numbers will dictate the short-term direction. How much of these numbers are dialed in to the trade?” Roose asks.

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