Chicago | Reuters — Chicago soybean and corn futures surged by their daily trading limits on Wednesday after the U.S. Agriculture Department released smaller-than-expected U.S. planting intentions.
Wheat followed higher, despite USDA’s higher-than-expected quarterly grain stocks.
The most-active soybean futures contract on the Chicago Board of Trade (CBOT) added 70 cents to $14.36-3/4 per bushel, its biggest daily gain since May 2016 (all figures US$).
CBOT corn gained 25 cents to $5.64-1/4 per bushel, while CBOT wheat added 16-1/4 cents to $6.18 per bushel.
Daily limits on CBOT corn will widen to 40 cents for Thursday’s trade, while soybean limits expand to $1.05, according to CME Group.
Farmers plan to sow 91.144 million acres with corn this year, the most since 2016, and 87.6 million acres with soybeans, the most since 2018, according to USDA. Both estimates were well below analyst expectations of 93.208 million corn acres and 89.996 million soybean acres.
“With those few of acres, with how tight stocks are, it just points out that if we have any kind of a summer drought this year, we’re in serious trouble in this grain market,” said Mark Gold, managing partner at Top Third Ag Marketing.
USDA’s quarterly grain stocks report noted levels near analyst expectations, with U.S. March 1 corn stocks pegged at 7.701 billion bushels, slightly lower than analyst predictions, while soybean stocks of 1.564 billion bushels were slightly higher than anticipated.
If USDA’s soybean planting intentions are realized, soybean supplies will remain especially tight through the end of 2021, said Craig Turner, ag marketing broker at Daniels Trading.
“We’re going to start off next year with extreme price rationing, where we have to limit the crush and exports,” he said.
Wheat followed corn and soybeans higher, even as all wheat acres are anticipated to climb five per cent to 46.4 million acres, versus analyst predictions of 44.9 million acres. USDA also noted wheat stocks of 1.314 million bushels, above estimates.
— Reporting for Reuters by Christopher Walljasper; additional reporting by Naveen Thukral and Sybille de La Hamaide.