US farmers have sowed more wheat, corn and soybeans than last year. Analysts, however, expected a larger acreage expansion than what the United States Department of Agriculture (USDA) announced yesterday (Wednesday, June 30). In addition, stocks of old crops have dwindled considerably.
In the acreage forecast, the USDA assumes that the maize acreage will increase by 2% compared to 2020. That comes down to 92,7 million acres (37 million hectares). That's an increase of more than 1 million acre from the USDA forecast in March, but analysts had expected a larger increase in acreage.
The soybean acreage will grow by 5% and will reach 87,6 million acres (35 million hectares), equal to the March forecast. Analysts previously expected an additional 1,5 million acres. The wheat acreage is 46,7 million acres (19 million hectares), according to the USDA. That is 5% extra compared to 2020, but it is the third smallest acreage since 3, when we started keeping track of the acreage.
Small stock
Not only the areas are lower. Inventories have shrunk considerably in the past year. The old crop wheat stock amounts to 1 million bushels (844 million tons) on 22 June this year. That is 18% less than on June 1, 2020. The maize stock also decreased by 18% and amounts to 4,11 billion bushel (104 million tons). The soy stock is even 44% lower than last year. In total there are about 767 million bushel (21 million tons) of soy in the US.
Analysts call the USDA figures surprising. With a tight grain balance and anything but ideal weather forecasts for July, the USDA is boosting the market upwards. That was clearly reflected on the CBoT, where prices rose. Volatile will therefore remain the main feature of the grain market in 2021.