USDA will release a couple of important reports next week that could shake the grain markets. The Prospective Plantings report and the Grain Stocks report will be released at noon next Wednesday.
Arlan Suderman, Chief Commodities Economist with StoneX, says the focus will be on the Prospective Plantings report and specifically soybeans.
“I’ve been looking for 90.5 million acres of soybeans to be planted this year. That’s a significant increase, about a 7.4 million acre increase in soybeans. And, frankly, those acres will come from prevent plant and from retired CRP contracts and are mostly in the Plains states. I don’t see a lot of change in crop rotations for the core of the Midwest. They’ll stick with their corn/soybean rotations to a great extent with a little bit of an increase in corn.”
Suderman says even at 90.5 million acres, he still has to do a little bit of rationing with prices in order to keep a lid on crush and exports in the year ahead because that’s not enough to keep up with demand.
“Most of the private surveys coming out to this point say that farmers intend on planting less than 90 million acres. If so, we better have a good growing season or see demand pull back with problems in China with African Swine Fever or we’re going to have another volatile year ahead.”
While the Prospective Plantings report will be the focus, Suderman is keeping an eye on the Grain Stocks report as well.
“That’s where the biggest surprises tend to come up. The focus is going to be on the acreage, but the biggest surprises tend to be in the stocks report. Particularly the last couple of years we’ve seen that in the corn market.”
Many of our HAT market analysts believe trade will be relatively flat between now and the release of the reports, barring any activity by China.