For corn and soy, the USDA's Prospective Plantings report, the area forecast, was fairly in line with analysts' and traders' expectations. The surprise in the report, which was published yesterday evening Dutch time, was in wheat. If the forecast comes true, the US will have the second smallest wheat area for the 2025 harvest since this statistic has been kept since 1919.
The May wheat contract on the Matif closed yesterday €1,50 higher at €220,25 per tonne. On the CBoT, grains also closed in the green. Wheat gained 1,7% on the CBoT to $5.37 per bushel. Corn closed 0,7% higher at $4.57¼ per bushel. Soybeans took a step back by 0,8% to $10.14¾ per bushel.
The USDA expects US farmers to plant 45,4 million acres of wheat this season. In the previous forecast, the USDA had estimated the area at 46,1 million acres, and compared to the 2024 crop year, 2% less wheat has been/will be planted. The largest decline is in spring wheat, which is 6% less planted compared to last season, according to the USDA forecast. Some analysts point out that the weather in the major wheat growing areas is also not cooperating. Drought and severe frost could mean that it is not worth the effort to use the combine harvester on part of the area next summer.
Largest corn area in 12 years
According to the USDA, U.S. growers are looking better at corn. The total area is estimated at 95,3 million acres. That is an increase of 5%, or 4,7 million acres, compared to last season. In 40 of the 48 states, corn acreage is staying the same or increasing, and the corn acreage is larger than predicted in various polls conducted in the run-up to the report. If the prediction comes true, the U.S. will have the largest corn acreage in 4 years. The report did not contain a big surprise for soybeans. The acreage is down 83,5% compared to last season to 2019 million acres. That is the smallest acreage since XNUMX.
Perhaps adding to the lackluster sentiment in soybeans this past trading session is the threat of trade tariffs hanging over the market. Tomorrow (Wednesday, April 2) has been declared by Trump as "liberation day" for the US. "The president will announce a tariff plan that will reverse the unfair trade practices that have plagued our country for decades. He will do so in the best interests of the American worker," said Karoline Leavitt, White House press secretary. Details of the plans have not yet been released, but players in the commodity markets are concerned about possible counter-sanctions from countries such as China and the EU.
Ukraine wants to invest in agriculture
The Ukrainian Ministry of Agriculture yesterday presented ambitious plans to further develop agriculture. Ukraine wants to increase the grain harvest to 100 million tons. For comparison: in 2024, about 54 million tons of grain and oilseeds were harvested. To achieve that goal, Ukraine wants to invest heavily in irrigation. "The yields of major arable crops such as wheat, corn, soy and sunflowers are on average 92% higher on plots where irrigation is possible compared to areas where it is not possible," the ministry writes.
Ukraine has approximately 32,7 million hectares of arable land and more than half of that will eventually face water shortages due to climate change, predicts the Ukrainian Ministry of Agriculture. Before the collapse of the Soviet Union, approximately 2 million hectares could be irrigated in Ukraine. Due to the economic difficulties after Ukraine became independent in 1991 and the Russian invasion in 2022, the area that can be irrigated has dropped to approximately 130.000 hectares in 2024. The Ukrainian government wants to have almost doubled that to 2030 hectares by 235.000 and 2050 hectares should be irrigated by 750.000.