USDA surprises by slightly raising U.S. area of soybeans

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The United States Department of Agriculture (USDA) surprised in its U.S. acreage report, released on June 30.

Although USDA confirmed the market’s feeling that the U.S. planted area would increase compared to what was initially projected in the March planting intentions report, the positive adjustment brought by the Department was much lower than estimated by the market. Because of this, after the release of the report, futures contracts in Chicago surged, with the spot position (July 2020) again approaching the level of USD 9.00 per bushel. At the end of the week, the first position closed at USD 8.92 per bushel, a level that had not been reached since March 4.

Regarding the quarterly stocks report, also released on June 30, there were no surprises, since the number brought by the Department was slightly higher than estimated.

According to USDA, the area planted with soybeans in the United States in 2020 is expected to total 83.8 million acres (33.9 million hectares). If confirmed, the area will be 10% larger than last year’s.

The number was below the market expectations of 84.76 million acres (34.3 million hectares) and slightly above the number indicated in the planting intentions report, released in March, which was 83.5 million acres (33.8 million hectares). In comparison with last year, the area has either grown or remained unchanged in 24 out of the 29 growing states.

The U.S. quarterly soybean stocks, for the June 1 position, totaled 1.39 billion bushels (37.83 million tons). Stored volume decreased by 22% compared to the same period in 2019.

The figure was slightly above the market expectations, at 1.38 billion bushels (37.56 million tons). Out of the total, 633 million bushels (17.23 million tons) are stored with growers, down 13%. Off-farm stocks amount to 753 million bushels (20.49 million tons), down 28%.