MarketsFarm — Much-anticipated acreage estimates from the U.S. Department of Agriculture, on Wednesday provided a bullish boost to Chicago Board of Trade (CBOT) soybean and corn markets, with planting intentions for both crops coming in well below trade expectations.
Corn futures were up by their 25 cents per bushel daily limit in reaction to USDA’s Prospective Plantings Report, while soybeans were also up by their 70-cent limit in many trading months.
“The USDA posted much less acres than expected, especially for corn and beans,” said Terry Reilly of Futures International in Chicago.
U.S. soybean plantings for 2021 were forecast at 87.6 million acres by the government agency. That would be up five per cent on the year, but well below average trade estimates near 90 million.
Projected U.S. corn area, at 91.1 million acres, would be only up marginally from the 90.8 million acres seeded in 2020 and well below average guesses closer to 93 million.
“Short-term it will be bullish, and we’ll probably take two or three sessions for traders to take positions,” said Reilly, adding that the focus will eventually shift back to spring planting weather.
“I think the USDA is a little bit short… and there’s a lot of room for some of these crops to increase their areas.”
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.