U.S. soybean futures fell to their lowest in a month and corn futures climbed on Thursday after the U.S. Department of Agriculture forecast that farmers would plant the most soybean acres on record in 2022 while reducing corn acres.
Soybeans for May delivery (S_1:COM) settled -2.8% to $16.18 1/4 per bushel on the Chicago Board of Trade, while May wheat (W_1:COM) closed -2.1% to $10.06 per bushel and May corn (C_1:COM) finished +1.5% at $7.48 3/4 a bushel.
ETFs: NYSEARCA:SOYB, WEAT, NYSEARCA:CORN
The USDA forecast U.S. 2022 soybean plantings at a record-high 90.95M acres, up 4% from 2021, while corn seedings are expected to fall 4% to 89.49M acres, and analysts said high fertilizer costs likely were steering U.S. farmers away from corn, which requires more fertilizer than soybeans.
Traders generally were surprised by the USDA’s low corn forecast, and “once the report came out as a huge surprise, the level of uncertainty about grain and oilseed production and stocks only got worse.” Craig Turner of Daniels Trading told the Wall Street Journal, adding that volatility stemming from the report likely will persist on the CBOT for the new few trading sessions.
“Corn acres will likely grow as prices adjust, but the total corn/bean number likely doesn’t change much,” RCM Alternatives analyst Doug Bergman told WSJ, adding that balance sheets will be sensitive to adverse weather during the April-June growing season.
“We’re pretty much going to need every acre that USDA reported this year in order to meet demand,” Futures International’s Terry Reilly told Reuters, as global demand for grain should remain robust given supply tensions created by the war between Russia and Ukraine, two of the world’s biggest grain exporters.