Department of Agriculture officials set new crop corn and soybean estimates for the upcoming marketing year, but traders expect corn acreage to increase in the next few months as producers switch acres due to higher prices.
In USDA’s World Agricultural Supply and Demand estimates report released Wednesday, U.S. new crop corn ending stocks are projected at 1.5 billion bushels, which is higher than the average trade guess of 1.34 billion bushels.
Using March Prospective planting report numbers, corn acres planted are estimated at 91.1 million acres with an average yield of 179.5 bushels per acre.
Allendale Broke Mike Lung said traders are expecting USDA to make further increases on corn acres moving forward.
He noted he’s had lots of discussions with farmers “that acres have been switched some from soybeans in Nebraska and Iowa, due to the better new crop price that December '21 corn has held compared to November '21 beans and profit potential,” Lung told Agri-Pulse.
Lung stated it’s the same story in North Dakota, with rumors of producers switching Spring Wheat acres to corn.
“New crop getting above $6.00 was a huge profit point for farmers that many couldn’t pass up, especially following the year many had last year,” he said.
Traders will also be watching China’s corn imports that were unchanged from 26 million metric tons.
On Monday, USDA announced a 1.02 million-metric-ton sale of corn to China for delivery in the 2021-22 marketing year.
Producers are estimated to average 50.8 bushels per acre of soybeans this upcoming marketing year with planted acres at 86.7 million. New crop ending stocks are set at 140 million bushels.
University of Illinois Economist Scott Irwin said in a tweet that is an “incredibly tight ending stocks projection” by USDA.
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“Projected usage base for US soybeans in 2021/22 is simply too big for 86.7 million planted acres,” he tweeted. There is “absolutely no room for even a small deviation below trend yield for the US 2021 crop,” he stated.
But Lung sees new crop soybean ending stocks to tighten further.
“Not only is the U.S. expecting more acres shift to corn (but) China also is expecting more acres to shift to corn,” Lung said. China released statements Monday night saying they are going to increase soybean imports, he said.
The average yield for U.S. wheat is 50 bushels per acre, with an estimated 46.4 million acres to be planted this growing season. Ending stocks for the 2021/2022 marketing year are set at 774 million bushels. Traders were expecting 730 million bushels.
USDA’s April corn production estimates for Brazil were set at 109 million metric tons, down to 102 million metric tons this month. This was lower than the average trade guess of 103.5 million metric tons.
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