The USDA’s 2023 Acreage report released on Friday, 30th June, surprised the soybean market, with the acreage given for soybean substantially below trade estimates. In its report, the USDA estimated total US soybean planted area for 2023 at 83.5 million acres, down by 4.5% from the March Prospective Planting report and by 4.8% compared to the average trade estimates of 87.7 million acres. Significant declines in key producing states such as Illinois and Iowa were highlighted, with the former down by 7.4% on the year and the latter by 4.0%. The decline in planted area is attributable to an expansion in corn planted area. Following the report’s release, the CBOT soybean futures price (Jul-23) settled at USc 1,557.2/60 lbs bushel, an increase of 5.0% compared to the previous day’s settlement.
Further contributing to the current bullishness in the soybean market is the latest USDA soybean stock estimates which reported an 18% y-o-y decline in soybean stocks as of 1st June. With stocks in all positions (on-farm and off-farm stocks) down to 796 billion bushels, this is a major concern as market players have stated to Mintec that the US could run out of beans before the upcoming harvest, lending tightness to the market.
The latest Crop Progress report, due to be released later today (4:00pm ET), will be a significant watch-point for the upcoming harvest as the market is keen to see if there will be a recovery in crop conditions which deteriorated to a 35-year low as of last week.