Markets unPACKed: American Acreage Realized
American Acreage Realized
In this column, we have included the latest data, charted out, thanks to our colleague Eric Oeth, who publishes charts regularly on weekly USDA data.
Last week was a big week for USDA data with the release of the USDA Acreage Report that publishes actual yearly acreage planted and harvest yield projections in the United States. The report stated that combined corn and soybean acreage is 180.2 million, an almost near-record amount from the record set in 2017, which was 180.3 million. However, this was lower acreage than the trade was expecting. Corn rallied 40 cents and soybeans rallied 85 cents on this news. Here are some visuals to demonstrate missed expectations.
Figure 1.
Figure 2.
The USDA made no margin for error with stocks, showing U.S. stocks are very tight.
Figure 3.
Figure 4.
Figure 5.
Speaking of the demand market, here are some additional visuals to demonstrate the difference in demand from years past.
Figure 6.
Figure 7.
Soybeans have not been as strong, but we are starting to see increased sales to China as of last week.
What’s Next
The answer is weather. June saw rain threaten the markets. Every time rain appeared in the forecast, corn and beans would trade 20 cents lower just because a bit of rain would help the crop, which was frustrating. Last weekend the corn belt from Iowa, Missouri, Illinois, and over to Ohio experienced torrential rainfall…and Monday morning the markets were 20 cents higher. That price action just demonstrated support at these levels. Every producer we spoke to said the crop looked great and yields were on pace to break records. Yet again, Monday and Tuesday were higher, ahead of the acreage report. We went into the acreage report expecting decent acreage numbers, but a price rally regardless. We certainly saw our rally.
Now, producers are saying it’s still a bit too dry in the West, and too wet in the East. We expect current prices to sustain, and we are in for a volatile summer.
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