Large US corn, soy acreage remains unplanted

Considerable US corn and soybeans acreage has yet to be planted this season, with the ongoing drop in prices offering little incentive for farmers to complete sowing. But potentially record yields for both crops has at least some market participants less worried.

The slower planting could lead to the US Department of Agriculture (USDA) revising down corn and soybeans acreage figures, the US balance sheet tightening, and ending stock projections potentially being cut.

Market participants are currently focused on summer weather, as it plays a major role in determining the final yield for both corn and soybeans. But if corn acreage decreases by 1mn acres to 90.5mn acres, corn yields would have to increase by 2 bushels per acre — or 1.1pc — to keep corn production flat. Similarly, a 1mn acre decrease in soybeans planted to 85.12mn acres would require yields to increase by 0.6 bushels per acre, or by 1.2pc, to have production remain stable. And while the increase in yields might not seem large, it would be record yields for both corn and soybeans if achieved.

In its 28 June acreage report, the USDA said 3.3mn acres of corn, or 3.7pc of the total corn acreage, and 12.8mn acres of soybeans, 14.8pc of total soybean acreage, were left to be planted.

The latest available data for the week ending 7 July shows that there were 1.9mn acres of corn unplanted, 23pc more than the three-year average, and 1.5mn acres of soybeans unplanted, 25pc above the three-year average.

The year 2022 serves as a good comparison for 2024. In 2022, 4mn acres of corn, or 4.5pc of corn acreage, and 15.8mn acres of soybean (18pc), were still unplanted when the USDA published its annual report at the end of June. The actual planted acres for 2022 showed that 1.8mn acres of corn and 875,000 acres of soybeans were not planted, according to the USDA.

In 2022, the main contributors to the lower final acreage were states that initially had the largest increase in the June acreage report.

Corn and soybean prices, as measured by the Chicago Board of Trade (CBOT) futures price, were down 11pc in June 2022 causing farmers to rethink their planting intentions.

During June 2024, CBOT corn prices fell by 11pc and soybean prices were down by 5pc. The latest farmers can plant their crops is June, as any crop planted later would mature too late and be at risk of frost damage.

The states of Kansas, Iowa and Nebraska had the largest projected increase in corn acreage in the June acreage report, at 1.15mn acres. That report forecast soybean acreage to increase by 600,000 acres for Kansas, Illinois and Minnesota. But the lower corn and soybean prices might lead those farmers to reconsider some of those acres.

That said, at least some market participants were not too concerned with lower acreage. The favorable July weather in the Midwest has some market participants anticipating record yields for both corn and soybeans, above the 181 bushels per acre for corn and 52 bushels per acre for soybeans that the USDA currently forecasts.

By Eduardo Gonzalez