‘Shock and awe’ hits soybean market after Acreage Report
July 1, 2014
- Cotton acres expected to increase to 360,000 acres
- Soybean acres expected to rise to 3.4 million acres
- Corn declines to estimated 580,000 acres
- Rice acres expected to increase to 1.571 million acres
JONESBORO, Ark. — Bears were running amok Tuesday through the corn, wheat, cotton and soybean markets in the wake of the annual Acreage Report from the National Agricultural Statistics Service.
“The shock and awe today came in the soybean market,” said Scott Stiles, extension economist for the University of Arkansas System Division of Agriculture. “Most market watchers have been waiting for the soybean market to fall apart. It finally happened.”
The November soybean futures contract lost 70 cents and had its lowest close since the end of February.
“Today also marked the biggest one-day drop in the November ’14 contract since it started trading back in 2010,” he said. “I think the key reason was the Acreage Report.”
Before the report, the average guess on U.S. soybean acres was 82.2 million acres, with the actual acres coming in at 84.8 million.
“When you consider the March 31 planting intentions were 81.5 million acres, today’s number is a significant jump,” Stiles said.
Only rice avoided the bears completely, “surviving the day with small gains in the new crop futures contracts,” he said.
Soybean and corn crops are rated in very good condition in the Midwest, with the U.S. “soybean ratings overall the second highest on record for this point in the growing season,” Stiles said. “For soybean and corn prices to turn higher, crop conditions will need to deteriorate as lot in these key states.”
Rice, corn acres higher in Arkansas
In Arkansas, the planted acres for both rice and corn exceeded the predictions of the March Prospective Plantings Report.
“Hitting the early projection of 1.5 million acres of rice was expected," said Jarrod
Hardke, extension rice agronomist for the University of Arkansas System Division of
"I was a little surprised that the acres bumped up 50,000 over early estimates,” he said, adding said “But then again, growers were still planting on June 20."
Jeremy Ross, extension soybean agronomist, said the Acreage Report’s 3.4 million figure was in line with expectations, however, “harvested acreage may take a hit with the current weather pattern.”
A wet, cold spring kept many farmers out of the fields at planting time and abundant summer rain at the end of June helped submerge what crops had been planted.
- Corn came in at 580,000 in the June 30 Acreage Report, compared to 600,000 acres estimated in the March Prospective Plantings Report. In 2013, Arkansas farmers planted 880,000 acres and harvested 855,000.
- Cotton acres planted were pegged at 360,000, up from the 340,000 acres March prediction.
- Rice - All rice, long, medium and short grains, totaled 1.571 million acres, up from the March estimate of 1.521 million acres.
- Sorghum -- The March estimate for Arkansas was 140,000 acres, same as the actual planted acreage.
- Soybeans -- The 3.4 million acres planted exceeded the March estimate of 3.35 million acres.
- Sweet potato acreage in Arkansas planted matched expectations at 4,000.
- Winter wheat -- Acres matched the estimated 440,000 acres.
Stiles said August would be a key month for the soybean markets. Cotton’s future would likely be dictated by Texas weather.
“Any return to extended drought in the High Plains could spark rallies in December cotton futures,” he said. “Stay tuned.”
The University of Arkansas System Division of Agriculture offers its programs to all eligible persons regardless of race, color, national origin, religion, gender, age, disability, marital or veteran status, or any other legally protected status, and is an Affirmative Action/Equal Opportunity Employer.
By Mary Hightower
U of Arkansas System Division of Agriculture
Media Contact: Mary Hightower
Dir. of Communication Services
U of A Division of Agriculture
Cooperative Extension Service