The Prospective Plantings report provides the first official, survey-based estimates of U.S. farmers’ 2018 planting intentions. The U.S. Department of Agriculture (USDA) National Agricultural Statistics Service’s (NASS) acreage estimates are based on surveys conducted from a sample of approximately 82,900 U.S. farmers during the first two weeks of March, prior to the announcement of proposed Chinese tariffs.

The report, published on March 29, was a somewhat of a surprise to the soybean market. The final number on soybeans was 88.98 million acres, which is well below last year’s record 90.14 million. Most in the trade were expecting 91.06 million acres, although the lowest trade estimate was 89.9 million. For soybeans, the lower acreage number came as a positive as prices were up about 26 cents per bushel the day of the report.

None of these numbers are set in stone.

The Prospective Plantings report is unique in that it is a survey of what farmers say they plan to do. If the soybean acreage comes out below expectations, then it tends to encourage farmers to actually plant more than they otherwise would have and vice versa. I have seen as much as a two million acre change in actual plantings versus the Prospective Plantings forecast.

There are a variety of reasons that farmers may have reported they plan to plant less than the expected area in soybeans. These include a need to rotate their crops, concern about soybean demand, worry about Brazil having a large crop, or cash flow issues. Some may have planted more winter wheat in the fall and have less land on which to plant soybeans.

Fewer planted acres may initially drive up soybean prices, but price depends on many factors such as outlook for demand, competitor production, the price of other crops that compete for land, and the weather. A reduction in planted soybean acreage will affect all in the value chain from seed and fertilizer producers to processors and exporters. Weather during the growing season and actual production, however, will ultimately have the most impact.