USDA report increases soybean acreage

The late June USDA Acreage Report is always highly anticipated, because it becomes the first hard data after the March USDA Plantings Intentions Report to give an indication of crop production levels in a given growing season, as of June 1. Many times the June USDA Report can have a big impact, either upwards or downwards, on grain market trends. The June 30 USDA report indicated that farmers planted less corn and more soybeans, compared to the USDA March Planting Intentions Report. USDA surveyed more than 70,000 agricultural producers during the first two weeks of June to gather information for the June 30 USDA Report.

The June 30 USDA report showed that a record number of soybean acres will be planted in 2015. The report listed 2015 planted soybean acres at 85.1 million acres, which is an increase of 2% from 2014 planted soybean acres, and was an increase of 504,000 acres from the March 1 planting intentions. Record soybean acreage in 2015 is likely in several States, including Minnesota, Ohio, and Wisconsin. The projected 2015 U.S. soybean acreage compares to 83.7 million acres in 2014, 76.5 million acres in 2013, and 77.2 million acres in 2012. The USDA projections for 2015 planted soybean acreage were very close to the average grain trade estimates. The June 30 report estimated the 2014 harvested soybean acreage at 84.4 million acres, which is approximately 1.3 million acres more than a year ago.

The June 30 Acreage Report listed total 2015 planted corn acres in the U.S. at 88.9 million acres, which is down 2% from last year, and is the lowest level of planted corn acres since 2010. Even with the decrease in corn acreage this year, the 2014 planted corn acres will still be the sixth largest on record since 1944. The June 30 report showed a decrease of about (302,000) planted corn acres in 2015, compared to the USDA Planting Intentions Report in March 2015. The 2014 U.S. estimated corn acreage compares to 90.6 million acres in 2014, 95.4 million acres in 2013, and 97.2 million acres in 2012. The June 30th USDA estimates for U.S. planted corn acreage in 2015 was slightly lower than the average of major grain analysts. USDA projected corn acreage harvested for grain in 2015 at 81.1 million acres, which is about 2 million acres less than in 2014.

Many areas of the southern Corn Belt and Plains states have struggled with prevented planting, flooded fields and excess rainfall. This includes key corn and soybean producing states such as Indiana, southern Illinois, Missouri and Kansas. USDA will re-survey 2015 soybean acreage in Arkansas, Kansas and Missouri, in order to properly account for prevented planted acreage. The general condition of the corn and soybean crop at the end of June in other areas of the U.S., including the Upper Midwest, was considered to be good to excellent in most areas. Many grain marketing analysts feel that the 2015 corn and soybean yields could be very good in some areas, but that the excessive moisture conditions in some key states will likely keep 2015 U.S. average yields below the 2014 record yields of 171.0 bushels per acre for corn and 47.8 bushels per acre for soybeans.

The USDA Quarterly Stocks Report on June 30 showed total U.S. corn stocks on June 1 at 4.45 billion bushels, which compares to 3.85 billion bushels a year ago. The June 30 USDA stocks estimate was below the pre-report estimates of most grain analysts. The combination of the reduction in corn stocks, together with lower-than-expected 2015 corn acreage, led to a short-term rally in the corn market. July corn futures on the Chicago Board of Trade (CBOT) closed at $4.19 on July 2, and December 2015 corn futures closed at $4.37 per bushel, both of which were at the highest levels in 2015. Local cash corn prices in southern Minnesota on July 2 were $3.75-3.90 per bushel for 2014 corn, and near or slightly above $4 per bushel on forward contracted 2015 corn, which is an increase of 50-60¢ per bushel compared to corn prices in late May.

The June 30 stocks report showed total U.S. soybean stocks on June 1 at 625 million bushels, which compares to 405 million bushels a year ago. The June 30 soybean stocks estimate was also below the pre-report estimates of most grain analysts; however, the projected record 2015 U.S. soybean acreage tempered the market increase a bit more, compared to corn. July CBOT soybean futures closed at $10.45 per bushel on July 2, and November 2015 futures closed at $10.30 per bushel, both of which are at the highest levels since early January 2015. Local cash soybean prices in Southern Minnesota ranged from $9.80 to just over $10 per bushel on July 2, and 2015 new crop forward contact prices were $9.65-$9.90 per bushel, which represents about a $1 per bushel improvement, compared to soybean prices in late May.

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