USDA Forecasts Decline in Soybean Acreage, Rise in Corn Plantings

Agriculture–USDA sees soybean acreage falling

In its latest Prospective Plantings report, the USDA estimates soybean plantings will drop significantly while corn acreage will rise this year. The agency projects 2023 soybean acreage at 83.5m acres, significantly lower than the March estimate of 87.5m acres and the market expectation of 87.7m acres. The US planted 87.5m acres of soybeans in 2022. In contrast, the USDA projects 2023 corn plantings to reach 94.1m acres (the highest since 2013), which is higher than the March estimate of 92m acres and the 88.6m acres planted in 2022. The market was expecting a number closer to 91.9m acres. Wheat planting estimates were trimmed to 49.6m acres, which was in line with expectations, and down from the 49.9m acres projected in March but higher than the 45.7m acres planted in 2022. CBOT futures were quick to react to the unexpected numbers with CBOT soybeans settling more than 6% higher on Friday, whilst CBOT corn settled more than 6% down on the day.

The USDA also released its quarterly stocks report (as of 1 June) last week, which showed a drop in US grain inventories. The agency reported corn inventories at 4.11bn bushels, down 6% YoY and lower than the market expectation of around 4.25bn bushels. For soybeans, the agency reported inventories of 796m bushels, down 18% YoY and below market expectations of around 805m bushels. Similarly, wheat inventories were reported at 580m bushels, down 17% YoY and lower than the 613m bushels the market was expecting.

The latest CFTC data shows that money managers reduced their net bearish bets in CBOT wheat by 31,966 lots to 52,168 lots as of 27 June, the lowest in seven months. The move was predominantly driven by a 33,030 lot reduction in the gross short position. Speculators cut their net long position in CBOT corn by 5,454 lots to 52,845 lots over the last reporting week. Meanwhile, speculators increased their net long in CBOT soybeans by 22,530 lots to 99,480 lots as of last Tuesday. Given the price action last Friday, it is likely the next positioning report will show a further boost in the soybean net long and a further reduction in the corn net long.