USDA's Planting Intentions Report - released last Thursday - is one of the most important reports of the year. It gives the total area of the main crops that American farmers intend to plant in the next cycle (24/25). As such, it sets the tone for the supply side of the balance sheets throughout the year.
In this report, we'll look at the main highlights of the report that impact the outlook for the American balances for the next marketing cycle.
Fig. 1: US Planted Area Summary (M ha)
Source: hEDGEpoint, Bloomberg, USDA.
This year, the Planting Intentions Report confirmed the market's expectation of a shift towards soybeans in American farmers' planting decisions. Although the market was already expecting this shift, the cut in corn acreage (-4.6M ac compared to 2023) was much larger than the market's average estimate (-2.8M ac).
Corn acres are lower across the Corn Belt, with marginal increases in the western part of the country. Corn acres were down from the previous year in 38 of the 48 states covered by the report.
As a result, the report showed that US farmers intend to reduce the total planted area by more than 3M ac - a much larger cut due to corn planting. This shows that farmers were more sensitive to the low price scenario.
Fig. 2: US Corn - Supply and Demand (M ton)
Source: USDA. *Considering the area estimate from the Planting Intentions and other estimates from the Outlook Forum.
Fig. 3: US Corn - Stocks and Stocks/Use (M ton, %)
Source: USDA. *Considering the area estimate from the Planting Intentions and other estimates from the Outlook Forum.
In soybeans, the USDA estimated acreage in 2024 at 86.15M ac, almost identical to the average estimate of 86.309M ac (range 84.3 to 88.0). Soybean acres in 2023/24 totaled 83.6 million. If realized, the 2024 planting would represent an increase of 2.91M ac, or 3.5% over the previous year. This would also mark the fifth largest soybean planted area on record.
Soybean area is expected to increase in most states. Of the 29 main soybean producing states, 22 are expected to see an increase in acres from last year.
In addition, the areas of both crops were lower than the initial estimates released at the USDA's Agriculture Outlook Forum in February. Considering the Planting Intentions, the US should still have looser stocks in both soybeans and corn in 24/25, but not as much as estimated in February.
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Fig. 4: US Soybeans - Supply and Demand (M ton)
Source: USDA. *Considering the area estimate from the Planting Intentions and other estimates from the Outlook Forum.
Fig. 5: US Soybeans - Stocks and Stocks/Use (M ton, %)
Source: USDA. *Considering the area estimate from the Planting Intentions and other estimates from the Outlook Forum.
It's interesting to note that, especially for corn, the USDA tends to overestimate yields in February, so a further tightening of the corn balance has a considerable chance of happening.
As a result, the US weather is likely to become increasingly important in the coming months, as corn planting has already begun in some states and soybean planting is expected to start in the coming weeks.
Fig. 6: US Corn Yield - Final versus Ag Outlook (bu/ac)
