U.S. farmers seeded more corn and soybeans than initially planned during the spring, taking advantage of a rallying futures market and good weather to plant as much acreage as possible, government data released on Thursday showed.
The robust plantings will likely add to an ample supply base of both commodities that the U.S. Agriculture Department said was bigger than traders had expected. The department's quarterly stocks report showed that corn stocks as of June 1 were the biggest since 1988 while soybean stocks for that period were the third-biggest ever.
Soybean futures, which had been lower before the reports, turned sharply higher as the acreage was below the average of analysts' forecasts. Soy prices hit a two-week high.
Corn extended losses, touching its lowest since April 13, after briefly rising following the release of the USDA acreage and stocks reports.
"The corn acres are what is surprising the trade," said Ted Seifried, chief ag market strategist at Zaner Group. The higher corn acreage and grain stocks are putting pressure on corn futures, he noted.
The acreage report showed that soybean plantings came in at a record 83.688 million acres, up from the government's March forecast of 82.236 million acres. Analysts, on average, had been expecting soybean plantings of 83.834 million acres.
Corn plantings were 94.148 million acres, topping the high end of estimates from analysts who on average had expected corn acreage to fall from the government's March forecast of 93.601 million.
Soybean stocks as of June 1 were 870 million bushels. Analysts polled by Reuters had predicted soy stocks would come in at 829 million bushels. A year earlier, soybean stocks stood at 627 million bushels.
Corn stocks came in at 4.722 billion bushels, up from 4.453 billion a year ago. Analysts, on average had been expecting corn stocks of 4.528 billion bushels.
Both the corn and soybean stocks figures topped the high end of analysts' forecasts.
Wheat acreage also was bigger than expected, with the government reporting increases in both winter wheat and spring wheat plantings compared to its March estimates.
USDA said all-wheat plantings in the United States totaled 50.816 million acres, compared to forecasts for 49.869 million. In March, USDA had pegged wheat seeding at 49.559 million acres.
Wheat stocks as of June 1 stood at 981 million bushels, up from 752 million bushels a year earlier. Analysts, on average, had been expecting wheat stocks of 982 million bushels.