USDA sharply cuts US soybean 2023-24 acreage estimates; corn revised higher

The acreage estimates for US soybeans in marketing 2023-24 (September-August) have been cut sharply from March, while corn acreage has been revised higher, the US Department of Agriculture said in a report released June 30.

Soybeans planted area has been estimated 4.6% lower from the March report to 83.5 million acres, which is also 4.5% lower on the year, the USDA data showed. While corn acreage is seen 2% higher than prior estimates to 94 million acres, up 6% higher on the year.

The USDA's latest estimates have taken the market analysts by surprise as the average acreage expectations for MY 2023-24 were 87.6 million acres for soybeans and 91.8 million acres for corn.

According to commodity analysts, soybean prices are likely to surge amid reduced acreage expectations, while corn prices could be under pressure on higher-than-expected acreage.

Platts, part of S&P Global Commodity Insights, assessed SOYBEX FOB New Orleans for August deliveries at $537.47/mt June 29 and CIF New Orleans corn for July deliveries at $245.30/mt.

Weather-driven market

The US soybean and corn markets have rapidly fluctuated since early May amid weather concerns.

Both soybean and corn crops in the US for MY 2023-24 have been under dryness stress for the better part of May and June, leading to a notable decline in crop conditions, especially in the eastern Corn Belt.

According to meteorologists, the key region of the Midwest has received only half of the usual rainfall so far in MY 2023-24, leading to significant stress on both corn and soybean crops.

The good-to-excellent condition ratings were assessed at 51% for soybeans as of June 25, the worst in 35 years. While for corn, the good-to-excellent ratings were at 50%, down 17 percentage points on the year, the USDA's crop progress data showed June 27.

However, there are forecasts calling for above-average precipitation in the first half of July, which is a critical period for both crops as they enter the development phase.

According to the June 29 National Oceanic and Atmospheric Administration report, the eight- to 14-day outlook projects above-normal rainfall for most of the central US July 6-12, with some higher-than-normal temperatures expected for the eastern Corn Belt.

Output expectations to change

Before the latest acreage report was released, the US was forecast to produce record volumes of corn and soybeans in MY 2023-24.

Corn production was pegged at 387.75 million mt, up 11% on the year, while soybeans output was projected at 122.7 million mt, up 5% on the year, according to the USDA's latest World Agriculture Supply and Demand Estimate report, released June 9.

However, as soybean acreage has been sliced massively for MY 2023-24, the output expectations are likely to be adjusted down significantly, market analysts said. While for corn, going by the USDA's latest acreage report, the record production forecast is possibly larger.

How the USDA's production forecast for soybeans and corn turns up in MY 2023-24 can only be revealed July 12 when the USDA releases its new WASDE report.