The News & What it Means – US Soybean Planted Area Could Surprise to the Upside and Corn to the Downside

By John DePutter & Dave Milne – June 27, 2017

 

The news:

“The average estimate for US soybean plantings for the USDA report on June 30th is 89.86 million acres. This compares to the March USDA estimate of 89.48 million acres.”

– Good Morning Prairies, June 26, 2017

 

What it means:

The USDA’s late-June acreage reports can be big market movers.

 

That is especially because they’re accompanied with stocks-in-all-positions reports. And they are released at a time of year when the most critical yield-making weather is about to take hold.

 

This year, it’s not a question of whether soybean acreage is up or down from last year. Everybody knows it’s up. At a new high record. Question is, how wide is the record margin? Will the USDA confirm the massive acreage projected in the March prospective plantings report, or pare it down a little? The result could have a big impact on prices.

 

There have been lots of years in the past when soybeans have gone limit-up or down right after these reports. Last year, the November soy contract jumped over 40 cents the day the report was released, and in 2015 it roared up 57 cents. In 2014, it plunged nearly 71 cents.

 

Here at the DePutter office, we always watch the market’s reaction closely. Sometimes how strongly a market reacts to what is construed as bullish or bearish news can offer tip-offs to where it’s headed.

 

If you’re interested in our analysis going into – and out of – important USDA reports, keep up to date with our Market Advisory Service.

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The news:

“The average estimates for the USDA June report has US corn acreage at 89.78 million acres, compared to the March USDA estimate of 90.0 million acres.”

– E-Morning Ontario, June 26, 2017

 

What it means:

US corn planted area was already set to decline from a year earlier due to the swing into soybeans, but the drop might be sharper than expected.

 

It was not a terribly good spring for parts of the Midwest this year and it’s possible that some producers were not able to seed all the acres they intended to corn because of excessive wetness. In those cases where the crop did get in, heavy downpours may have washed it out.

 

In any event, this could finally be the year when soybeans supplant corn as the most widely planted American crop.

 

Given the likelihood this year’s average yield won’t be high enough to make up the difference, Friday’s USDA acreage report could cause some fireworks if indeed it shows a surprisingly low planted area. Last year, the new-crop December corn future lost almost 12 cents on the day the USDA’s June acreage report was released. In 2015, it gained more than 29 cents and in 2014 it dropped 22 cents.

 

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