Lower prospective plantings leading to a bullish market

28th of March, USDA released their annual prospective plantings report for the coming year. They are reporting a decrease of 5 percent in corn planted acreage from 2023. USDA estimates that the planted area for corn for all purposes in 2024 will be at 90 million acres. This is 4.61 million less than last year. In terms of wheat, the planted acreage is reported to be down by 4 percent. The planted area for all wheat types is estimated at 47.5 million acres for 2024. More specifically, winter wheat is set at 34.1 million acres. Where 24.3 million of these are Hard Red Winter, and 6.26 million acres are Soft Red Winter. The remaining 3.59 million acres are White Winter Wheat. Spring wheat is estimated to be 11.3 million acres for 2024, where 10.7 million acres are Hard Red Spring. Durum wheat is expected at 2.03 million acres.

As an immediate response to the publication of the prospective plantings report, corn prices saw a surge on March 28th. The US being the world’s largest corn producer, prospective US plantings affect market sentiments. The intra-day price variation on this date ranged from 425.84 - 445.07 US$/bushel. A similar effect was seen in wheat prices, with an intra-day price increase of 545.51 - 564.06 US$/bushel. Russian authorities have deferred wheat exports from Russia in recent weeks. As a response to their actions and shipment disruptions, global prices are expected to rise. According to sources, the halted grain exports are caused by Russia failing to meet the requirements of phytosanitary certificates - the quality is not satisfactory.

As a result of this, wheat futures prices are up since last blog entry. Wheat is up to $568.26 per contract, seeing a steady rise since the settlement of the March contract. Corn has seen a somewhat increase as well since last time, ending the week at $433.52.

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