USDA’s June 30 Acreage report released this morning found corn taking back the title of the largest crop produced in America in 2022. USDA raised 2022 acreage expectations for corn by 431,000 acres from the March 31 Prospective Plantings report. Markets pared some of their earlier morning’s losses on the news.
“USDA’s March 31 Prospective Plantings report had projected higher soybean acreage relative to corn for only the third time in U.S. history,” according to Farm Futures grain market analyst Jacqueline Holland. “But today’s report puts corn back at the top of the food chain.”
But the big surprise following a cold and wet spring that caused severe planting delays was the sudden acreage shrink for soybeans, Holland adds. USDA shaved 2.6 million acres from the March 31 soybean planting estimate, dropping it to 88.3 million acres. It now trails 2017 (90.2M ac.) and 2018 (89.2M ac.) as the third largest U.S. soybean crop on record.
Combined corn and soybean acreage dropped 2.2 million acres lower than earlier Prospective Planting estimates, primarily on smaller soybean acres, with much of that acreage going to hay, durum, cotton, sorghum and barley acreage.
Quarterly grain stocks readings were largely in line with pre-report trade estimates, providing neutral price reactions across the corn, soybean and wheat complexes following the report’s release. The results for soybeans and wheat hinted at smaller than expected demand usage rates between March 1, 2022 and June 1, 2022.
USDA pegged corn plantings at 89.9 million acres, which is 4% (3.44 million acres) down from 2021’s footprint. That was very close to the average trade guess of 89.861 million acres, and slightly above USDA’s March estimate of 89.490 million acres. USDA notes that planted acres are steady or lower in 35 out of 48 states. Expected harvest area is also down 4% from a year ago, with 81.9 million acres.
“It was a bit of a surprise to see corn markets greet the extra acreage with such heavy losses following the report’s release,” Holland says. “I think the losses may be more of a function of demand and current weather forecasts because the extra acreage is only slated to provide an additional 43 million extra bushels of corn to 2022/23 production estimates. With as tight as global corn supplies currently are forecasted, I’m not sure that that extra production value is enough to cause a bearish price reaction. Those 43 million bushels could very quickly be exported or processed domestically.”
Corn stocks through June 1, 2022 increased 6% year-over-year, to 4.35 billion bushels. That was a bit higher than but very close to the average trade guess of 4.343 billion bushels. Of the total, on-farm storage is at 2.12 billion bushels, up 22% from a year ago. The remaining 2.23 billion bushels are stored off the farm, a year-over-year decline of 6%. Disappearance between March and May is 3.41 billion bushels, versus 3.58 billion bushels over the same period a year ago.
Estimated soybean plantings increased 1% from a year ago, with 88.3 million acres this season. Analysts were much more bullish in their expectations, offering an average trade guess of 90.446 million acres prior to today’s report. USDA’s March estimates were also more aggressive, when the agency pegged the 2022 footprint at 90.955 million acres. USDA notes that planted acres are steady or higher in 24 out of 29 states.
Soybean stocks as of June 1, 2022 climbed 26% higher from a year ago, to 971 million bushels. That was slightly above the average trade guess of 965 million bushels. On-farm storage accounted for 331 million bushels (up 51% from last year), with the remaining 640 million bushels stored off the farm (up 17% from last year). Disappearance between March and May reached 960 million bushels, which was up 21% from the same period last year.
“Stock volumes improved considerably over last year, thanks to a record 2021 soybean crop. But that doesn’t mean that supplies are any less tight,” Holland says. “These high usage rates suggest that domestic soybean supplies may be in short order this summer, especially after China’s unseasonal buying spree this spring following South American crop shortfalls over the winter.”
“While this could make for a challenging summer for domestic crush plants looking to maintain production schedules – or international buyers desperate for oilseeds – it’s good news for producers because it increases the likelihood of originators keeping cash bids high until harvest begins this fall,” Holland says.
All-wheat acres firmed 1% higher from last season, with 47.1 million acres. “If realized, this represents the fifth lowest all-wheat planted area since records began in 1919,” USDA notes. Here’s a closer look at the acreage breakdown:
- Winter wheat – 34.0 million acres (up 1%)
- Hard red winter wheat – 23.5 million acres
- Soft red winter wheat – 6.86 million acres
- White winter wheat – 3.61 million acres
- Spring wheat – 11.1 million acres (down 3%)
- Durum wheat – 1.98 million acres (up 21%)
Wheat stocks eroded 22% lower from a year ago, meantime, to 660 million bushels. That was slightly higher than the average trade guess of 655 million bushels. Of the total, 93.0 million bushels are in on-farm storage (down 34% year-over-year), with the remaining 567 million bushels stored off the farm (down 19% year-over-year). Disappearance between March and May totaled 364 million bushels, which was down 22% from the same period last year.