More Corn and Fewer Soybean Acres Than Expected — a Canadian Perspective on the March 31st USDA Acreage and Stocks Reports

After months of anticipation, the grain and oilseed market finally got to see the U.S.D.A.’s acreage estimates for 2015 on Tuesday morning.

While traders had braced themselves for some surprises and volatility, most of the numbers in both the Prospective Plantings and Quarterly Grain Stocks reports fell within the range of expectations. However, the numbers were still viewed as bearish for corn and slightly bullish for soybeans.

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Both the corn stocks and acreage estimates were higher than the average trade guess, notes Errol Anderson of ProMarket Communications in the interview below. The U.S.D.A. pegged corn acreage at 89.2 million acres — the average pre-report estimate was around 88.7 million acres. Corn stocks came in at 7.7 billion bushels — slightly higher than the average guess of around 7.6 billion. (continued below)

For soybeans, the acreage estimate of 84.6 million acres was lower than expected, with traders generally thinking the number would be closer to 86 million. The soybean stocks projection of 1.33 billion bushels was in line with pre-report guesses.

Wheat futures declined following the report, despite largely neutral data in the report, notes Anderson.

“In all honesty, I thought the data on the wheat was for the most part neutral, and if anything, we may see some gains on the wheat market in the long-term,” he says.

Now that the market has a starting point for acreage, the trade will likely shift its focus to weather conditions for seeding and the rest of the growing season.

“We’re going to have one heckuva weather market in the next few months,” suggests Anderson. “There are going to be rallies on these grain markets. Everything is not perfect in the world and there will be opportunities for growers to price for new crop when this occurs.”

Statistics Canada will release its acreage report on April 23rd.

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