US corn futures plunged more than 4 percent on Thursday in the market's steepest drop since mid-August after the US Agriculture Department forecast 2016 planted acreage well above trade expectations. Soybeans firmed on the USDA's lower-than-expected soybean acreage and quarterly stocks estimates, although gains were limited by spillover pressure from corn.
Wheat climbed on short covering, led by spring wheat futures which gained nearly 3 percent after the government pegged planted acreage below expectations at the lowest since 1972. Corn fell to contract lows as the USDA report showed US farmers are planning to boost seedings by 6.4 percent this year to 93.601 million acres (37.88 million hectares), which would be the third-highest level since 1944.
"That's going to be the headline grabber: the big surge in corn acres," said Arlan Suderman, chief commodities economist for INTL FCStone. "Farmers prefer to plant corn. That's their desired crop. They see the most opportunity there for being able to capture something down the road if we have a weather scare," he said. Soybean seedings were seen at 82.236 million acres, which would be the third-highest ever but below the average trade forecast.
However, analysts said final acreage has would likely shift due to firmer soybean prices since the USDA's survey was concluded earlier this month and as some farmers in flooded areas of the South may replant corn fields with soybeans. "This survey was taken a little over four weeks ago, and a lot has happened during these last four weeks," said Ted Seifried, vice president and chief market strategist for Zaner Ag Hedge.
The USDA also pegged March 1 corn stocks at 7.808 billion bushels, above the average analyst estimate of 7.801 billion and the largest for the quarter since 1987. Soybean stocks rose to 1.531 billion bushels, below trade expectations for 1.556 billion, while wheat stocks rose to 1.372 billion bushels, compared with forecasts for 1.356 billion. Chicago Board of Trade May corn dropped 15-1/2 cents, or 4.2 percent, to $3.51-1/2 a bushel. The contract ended down 1.5 percent for the month, the fifth monthly drop in six months for a spot contract.
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