USDA Reports – You Reap What You Sow

We’ve just released our take on the USDA’s March 2021 Stocks and Plantings reports.

Here are the main highlights

The USDA’s March 2021 Prospective Plantings reports were a massive, bullish surprise in corn and soy, as expectations for a record 183m combined acres were dashed by the herculean difficulty of growing US acreage by 6% in one year. Instead, corn and soy are pegged at 178.6m acres, a mere 2.7% above last year’s Covid-depressed levels. Wheat appeared to capture more acreage than expected. Since acreage estimates were taken when grain prices were higher, it stands to reason that prices must gain to keep desperately needed acreage in line with or above the report. Grain stocks provided no solace for the bears, with results more or less in line with expectations. The report may spur bullish moves to encourage more plantings, but it cannot answer the burning question that has driven a multi-year price risk rally in CBOT: will farmers reap what they sow?