The U.S. Department of Agriculture (USDA) revised its 2019 U.S. soybean planted area estimate to 31.039 million hectares from its June acreage forecast at 32.391 million. That was a downward adjustment of 1.352 million hectares or -4.2%. USDA revised its soybean harvested acreage estimate to 30.702 million hectares from its June acreage forecast at 32.078 million. That was a downward adjustment of 1.376 million hectares or -4.3%. The planted acreage report was more than 1.619 million hectares below published trade expectations. It represents a drop of 5.057 million hectares from 2018 plantings of 36.096 million. The release of much-anticipated Farm Service Agency prevented plantings out from USDA on August 13 placed those acres at 1.761 million hectares. The combined plantings at 31.039 million hectares and prevented plantings at 1.761 million imply a soybean acreage base of 32.800 million. There will be some later reported prevented planted acres, but those usually are not too significant. At a total of 32.8 million hectares, the theoretical soybean acres base was substantially less than the 34.236 million hectares of planting intentions indicated in March Prospective Plantings. This suggests that more favorable corn prices likely incentivized some farmers to push acres to corn despite issues with plantings.
USDA placed the national soybean yield at 3.26 MT/hectare, which was unchanged from last month and toward the high end of trade expectations. The trade expectations were for a national yield closer to 3.19 MT/hectare. The combination of fewer acres, but higher than expected yields, resulted in a production forecast of 100.159 million tonnes. Various polls published ahead of the report ranged between about 102.875 million tonnes and 103.419 million tonnes. As it turned out, the lower acreage dominated the calculation and brought production in less than expected. There were a few production forecasts that were less than the USDA forecast, but for the most part, even the lower forecasts for the trade were anticipating more plantings and production that would at least reach 101 million tonnes or more.
In its supply/demand analysis, USDA’s old crop ending stocks forecast was lifted by 544,311 tonnes to 29.132 million. That reflected a 272,155-tonne reduction in the crush forecast. With the lower acres, the seed estimate was reduced by 108,862 tonnes while there was an equally offsetting increase to the residual use forecast. Turning to the new crop forecast, the production forecast was reduced by 4.491 million tonnes. A large portion of the lower production was then offset by a 2.722-million-tonne cut to the export forecast and by the 544,311-million-tonne increase in the old-crop carryover. USDA did leave the crush forecast unchanged at 57.561 million tonnes. The net of these adjustments lowered the ending stocks forecast by 1.089 million tonnes to 20.544 million. USDA’s farm-level cash price forecast was unchanged at $8.40 per bushel.
The release of lower-than-expected soybean plantings brought some modest buying interest to the market in the wake of the report, but the response appeared to have been muted by greater-than-expected corn plantings and bearish U.S. wheat data points. We would expect to see the upside remain limited for soybean futures in Chicago so long as selling remains a feature in corn and wheat markets. Aside from the upcoming crop tour that will provide insights to crop conditions in the U.S. Midwest later this month, the market will likely remain focused on changes to the U.S. weather patterns as the 2019 soybean crop advances into its final, key yield-determined stages of pod setting and filling.
