Following the June 30 USDA Acreage Report, markets are watching demand factors and potential weather impacts to crops. Micheal Clements shares more details about the report.
Clements: The June 30 Acreage Report confirmed farmers have planted more corn and soybean acres this year compared to last. AFBF Economist Shelby Myers outlines the data reported by USDA.
Myers: USDA is estimating that corn planted area will be 92.7 million acres, which is up two percent compared to 2020, but it’s also an increase of 1.6 million acres from what was first reported in the March Prospective Planting report for corn acres. Soybean planted acres remain at the 87.6 million acres that was also reported in March, and that's up five percent from 2020.
Clements: However, Myers says the report indicates no major expansion of production despite rising prices of corn and soybeans.
Myers: Corn and soybean futures prices have risen, 23 percent for corn and 16 percent for soybeans, compared to where USDA estimates the 2020-21 marketing year price is. So, given the current demand expectation that we won't see updated until July 12 in the WASDE, market indicators imply prices will hover around the current levels that they are, remaining high.
Clements: Myers adds the focus now is on weather-related market impacts.
Myers: Attention has definitely shifted to monitor weather impacts, and that will really determine the crop quality and overall supply quantity. We're monitoring drought in the West and that's simply moving eastward, and you see heavy rains in the south and along the Mississippi Delta region. That all could really cause current supply estimates of these principal crops to drop if the weather conditions aren't ideal.
Clements: Learn more at fb.org/marketintel. Micheal Clements, Washington.