The June 30 USDA Acreage report pushed grain markets into the green, with corn prices up 6-7 cents, soybeans up 29 cents and wheat up 27-28 cents immediately following the report’s release. Grain marketers say they’re glad to have the report behind them so they can focus on what’s next.
“This gives us a solid foundation to trade on,” says Angie Setzer, vice president of grain at Citizens LLC. “It’s certainly not the end-all of summer trade. This allows us to start focusing on crop conditions and weather”
Corn acres were reported down 3% from 2016, and all wheat acres are down 9%, while soybean acres increased 7% from 2016 and cotton acres soared 20% higher.
Chip Flory, editorial director of Pro Farmer, notes that total principal crops area planted slipped by about 1 million acres this year. States with the steepest slides include Texas, Kansas, Oklahoma and Montana. Meantime, some states saw significant acre gains, including Minnesota, Iowa and Georgia.
But don’t forget that the question the report answers covers both planted acres and intended plantings. That could lead to acreage shifts as the season progresses.
“We don’t know if all the intended acres were actually planted or not, so we could see corn acreage pull back just a little bit by the time we get to the October report,” Flory suggests. “But these are the numbers we’re going to have to work with throughout the growing season.”
And what’s actually in the ground may not be harvested, Flory adds. He cites spring wheat as one example – USDA anticipates 96.3% of the crop will be harvested even though drought is building in some of its major production regions.
“That’s potentially way too high,” he says. “I think there will be acreage adjustments coming on both spring wheat and durum down the road.”
For now, patience will be key, Setzer says. The majority of the crop season still hasn’t happened, she says.
“We’re still a long way from knowing what’s actually going to be harvested, especially where drought is a limiting factor,” she says.
Listen to additional insights from Flory on Market Rally.