Market participants expect USDA to boost US crop acreage estimates

Market participants said that the US Department of Agriculture (USDA) is likely to bolster acreage projections, especially if there is warm weather in the weeks ahead, which could encourage farmers to till additional fields.

US corn planted acreage is projected to slip by 3.8% to 91 million acres this year, and wheat acreage should fall by 5.3% to 47 million acres, while soybean planting should buck the trend and rise by 4.7% to 87.5 million, according to the 2024 USDA Commodity Outlooks released on February 15.

The USDA will update its crop acreage estimates in its annual Prospective Plantings report, which will be released on Thursday March 28.

“I am not buying into the idea that we will have several million less corn acres this year as right now that is the trade narrative,” Brian Hoops, president at Midwest Market Solutions, said.

“There may be some areas that plant less corn, but for the most part, I think there won’t be much change from a normal year or a normal rotation,” Hoops added.

On March 13, agricultural brokerage Allendale published its own estimates for US crop acreage that were substantially higher than those from the USDA.

Allendale projected that farmers will plant 93.47 million acres of corn, 47.62 million acres of wheat and 85.83 million acres of soybeans in 2024.

“Economics should lean a little better for soybeans this year, but early feedback from producers hints that there won’t be much of a change [compared with] last year,” Kelly Herrick, a US-based analyst at Advance Trading, said.

US farmers often rotate corn and soybeans in the same field because it can both improve soil health and increase yields.

“Midwest farmers like to plant corn, to put it mildly, and don’t like to vary all that much from the 50-50 rotation; if spring conditions permit, they may very well plant a little more corn before turning to beans,” Advance Trading’s Larry Shonkwiler said.

On March 11, temperatures reached a high of 77°F (25°C) in Lincoln, Nebraska, which was 26 degrees Fahrenheit (14.5 degrees Celsius) above the peak, an example of the higher-than-normal temperatures in the country’s third-biggest corn producing state.

Much warmer-than-normal temperatures were also experienced earlier this month in neighboring states such as Kansas, Missouri and Iowa, before temperatures dropped.

The National Weather Service’s six-to-10-day outlook for March 24-March 28 forecast below-normal temperatures across the Great Plains and the western Corn Belt, while the eastern Corn Belt is projected to experience warmer-than-normal weather.

“If weather permits, producers tend to plant more corn if the planned area gets planted in a timely manner,” Terry Reilly, senior agricultural strategist at Marex, said.

“We think the USDA was too low on the combined corn, soybean and wheat area to begin with,” Reilly added.

Projections of higher acreage are not universal, with some stating that ample stocks in growing regions, dry conditions and economic concerns will lead farmers to keep a lid on sowing.

“The idea that areas awash in farmer corn stocks will sharply expand spring acres seems a bit counterintuitive,” McWheat Trading’s Jeffrey McPike said.

“I am under 90 million acres for corn and have a lower all wheat number than the USDA did last month,” McPike added.