Grain traders are still unsure of actual planted cropland after USDA dropped planted corn acres estimates by just over 1 million in its June Acreage report Friday. Many traders find that difficult to believe after farmers in the eastern Corn Belt struggled to plant a crop this spring.
USDA's National Agricultural Statistics Service estimates farmers planted 91.7 million corn acres this growing season, a 3% jump from last year’s 89.1 million acres. The number is also 1.1 million below the Prospective Plantings projection of 92.8 million released in March. Traders expected corn plantings to be around 86.7 million acres.
“That number is not that accurate,” Steve Georgy, president of Allendale, Inc. told Agri-Pulse of the 1.1 million-acre drop. He says traders were expecting a more substantial reduction and that “was a surprise enough that it had people scared, and now we’ve gotten that price action because of it.”
September corn futures fell 19 cents, or about 4%, to $4.26 a bushel.
Like most traders, Georgy anticipates further cuts to acres. “A lot of guys are still using 7 to 10 million acres of preventive plant (as an estimate), and we still need to realize that,” he said.
USDA confirmed NASS will collect updated information on 2019 acres planted to corn, cotton, sorghum, and soybeans in 14 states next month. That information will be released in a Crop Progress due out August 12.
Traders expected USDA to peg soybean acres at 84.4 million, but the department estimates farmers will sow 80 million acres this year. This is a 10% drop from last year’s number of 89.1 million and 4.6 million acres lower than the March planting intentions report.
The cut to soybean acres caused August soybean contracts to start trading roughly 10 cents higher after the report was released before finishing at $9.045 per bushel.
Georgy noted while there was a 47% increase in soybean stocks over last year in the quarterly Grain Stocks report also released today, the number was within trade expectations. USDA estimates 1.79 billion bushels of stored soybeans as of June 1, which came in just under trade estimates of 1.8 billion.
All wheat planted area for 2019 is estimated at 45.6 million acres. This number is down 5% from 2018. It is the lowest all wheat planted area on record since records began in 1919, according to USDA.
All cotton planted area for 2019 is estimated at 13.7 million acres, 3% below last year.
Corn stocks in all positions at the beginning of this month totaled 5.2 billion bushels, down 2% from a year ago. All wheat stocks are down 2% from last year totaling 1.07 billion bushels. Rough rice stocks are up 46 percent from last year, totaling 65.8 million hundredweight (cwt).
The next big item traders are watching is President Donald Trump’s meeting with Chinese President Xi Jinping Saturday.
“As long as things are getting better, the market is going to perceive it as that,” Georgy said. “But if we start hearing more tensions again or tariffs, that is usually a more negative sign to the markets and that happens very quickly.”
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