The USDA has stunned market expectations after delivering a markedly smaller-than-expected outlook for the country’s 2021/22 prospective plantings in its first official outlook.
Despite boosting corn planting by 1% versus 2020/21 and soybeans by 5%, the report, which is based on farmers’ own planting expectations, fell well short of the expectations from market analysts.
At 91.1 million acres, US corn production came in short of the 92 million acres the USDA revealed in its own Outlook forecast in mid-February and well below the 93.2 million acres that analysts had been looking for.
On soybeans, trade had been expecting confirmation of a 90 million acre planted slate, but the USDA delivered an 87.6 million acre outlook in a move then compounded by a 31% reduction to ending stocks.
The move ignited both corn and bean futures contracts as the market digested the forecast, with production in the new marketing year now likely to come in well below expectations, accentuating an already low ending stock environment.
The data came alongside the USDA’s quarterly update to stock levels and blew away much of the week’s falls recorded on both contracts.
Corn futures raced to their trading limits as all four front month contracts, May, July, September and December, jumped 25 cents, while the impact for soybeans was even more acute as contracts out as far as January 2022 piled on up to 70 cents.
Alongside the much-anticipated soybean and corn updates, the USDA also provided a view of its wheat planted area, estimating its 2021 area at 46.4 million acres, up 5% on 2020, but noting that “this represents the fourth-lowest all wheat planted area since records began in 1919.”
Of that, winter wheat will cover 33.1 million acres, up 9%, with spring wheat covering 11.7 million acres, down 4%.
Durum wheat is expected 1.54 million acres, down 9% from last year.