Acreage shift not as wide as expected

KANSAS CITY, Mo. — The U.S. Department of Agriculture’s prospective planting survey indicated farmers aren’t making as large of a shift toward more soybeans and less corn acres as expected — but with a caveat.

The survey, released March 31, was based on responses in the first two weeks of March.

Since that time, the war in Iran resulted in cutting off fertilizer supplies shipped through the Strait of Hormuz, raising concerns about higher input costs and shortages for U.S. farmers. About one-third of the world’s seaborne fertilizer is shipping through the strait.

A clearer picture of U.S. corn and soybean planted acres will wait until USDA’s June 30 report.

In the meantime, the market will use data from both the prospective planting and quarterly stocks reports, while monitoring planting conditions, export sales and the geopolitical atmosphere.

This report’s acreage will be plugged into USDA’s first look at the new crop 2026-2027 supply and demand estimates in May.

Arlan Suderman, StoneX chief commodities economist, provided his take on the USDA reports in a webinar.

USDA’s prospective plantings report put corn acres this year at 95.3 million acres. What was expected?

Suderman: The trade was expecting 94.4 million acres. Last year, it was 98.8 million acres, so that’s fairly significant. StoneX was looking for 94.65 million acres.

Looking at the corn planted area year-over-year changes, Iowa typically doesn’t see much change. A 450,000-acre decrease in corn area from last year is quite a change.

It was the same in Wisconsin and Nebraska. That’s 1.35 million acres less corn acres in those three states.

If you add South Dakota, a 550,000-acre decrease, that’s 1.9 million acres. North Dakota is down 300,000 acres.

That’s some significant acreage declines in the northwestern part of the Midwest for corn, which is the direction the Corn Belt has been moving in recent years.

An estimated 84.7 million acres of soybeans will be planted in the United States. Again, what was expected?

Suderman: The trade was expecting 85.5 million. It was 81.25 million last year. That’s a 3.5 million-acre increase this year. I was expecting 85.35 million acres.

How much does that change over the next few months after the Environmental Protection Agency finalized the 2026 and 2027 Renewable Fuel Standard renewable volume obligations, being announced after the survey was done, and with the prolonged war in Iran? How does that play out?

What impact did this shift have on wheat acres?

Suderman: All wheat acres were 43.8, 1 million below the trade estimate. I was actually lower on both winter wheat and spring wheat acres.

There was almost a 600,000 acre decrease in North Dakota wheat acres. Between Montana and North Dakota, there’s 1 million acres of wheat lost. There is an increase in the southern Plains, and a lot of that is to be grazed off.

There was a 0.5% decline in the principal crop area planted, which includes more than a dozen crops. What are some of the factors behind that decline?

Suderman: That could be survey error. It could be a number of things, but generally it gives us a feel overall of where we’re at on acreage as a whole.

But when you go up 4% like Alabama did, that’s probably significant. When you go up 0.2% in Iowa, that’s probably survey error.

Corn and soybean acreage combined came in right around 180 million acres. That doesn’t show much change in corn acres and I think that shows some stability overall for the corn and soybean acreage.

If we look at the percentage change of principal crops from last year, there’s nearly a 15% increase in canola, 7.6% increase in sunflowers and a 4.3% increase in soybeans.

Those are all oilseeds, anticipating the big RVO programs for biofuels, and they got their wish when the new RVOs were announced last week, so to speak.

I did not expect to see cotton go up by 3.9%. In looking at the actual acres, cotton is up about 358,000 acres, soybeans up 3.485 million acres, corn down 3.45 million acres.

So, really, that’s that switch between corn and soybean acreage that USDA is reflecting in this overall survey.

Jumping to the quarterly grain stocks report, corn supplies of 9.024 billion bushels were below pre-report trade estimates, the 2.105 billion bushels of soybeans stocks were above expectations and wheat was in line with estimates at 1.3 billion. What do you think about those numbers?

Suderman: The pre-report trade average for corn stocks was 9.104 billion bushels. We did see a year-over-year increase in corn stocks across the Midwest, especially in Illinois, Iowa and Minnesota.

Soybeans were about 40 million bushels or so higher than the trade expected and 200 million bushels more than we anticipated.

Since exports and crush are measured, that tends to reflect on the residual, which is a factor of did the USDA estimate the size of the crop properly.

Those adjustments will come Sept. 30. In the meantime, we have to start adjusting some other factors like residual use.

As with corn, there was also an increase in soybean stocks in Illinois, Iowa and Minnesota. There’s more grain in storage in those states than we had a year ago at this time.

What is the trend and outlook for corn usage as we enter the second half of the marketing year?

Suderman: Marketing year to date, corn export inspections exceed the seasonal pace needed to hit USDA’s target by 298 million bushels. The question is, where do we go from here?

I still think you could justify another 75-million-bushel increase in exports in the April and/or May report. But will we get it? That’s largely going to be determined by what the market sees in Brazil’s growing season.

If Brazil gets a bumper crop, they have more to export in the 2026-2027 marketing year more than anything. If it’s a short crop, then you’ll see customers trying to buy forward and that pulls into the end of this marketing year, worried that prices will go higher.

On the domestic side, we’re not using enough corn for ethanol. We’re producing ethanol at a good clip, but we’re becoming more efficient and needing less corn to produce it.

Year-round E15 is what we really need to increase the demand of ethanol. Voluntary E15 sales are current offered in many states and since 2020 we’ve had waivers to allow year-round sales.

Otherwise we still have this old rule on the books that you can’t sell E15 in the summertime, and that’s due to lobbying that the fossil fuel companies did some years back.

Legislation is focused on allowing E15, not mandating it. Keep in mind that in Brazil it’s mandated at 30% and they’re thinking about going 35%.

What is the mid-marketing year usage outlook for soybeans?

Suderman: Soybean marketing year export inspections to date fall short of the seasonal pace needed at USDA’s target by 112 million bushels, but that deficit shrank by about 9.9 million bushels last week.

As of Thursday, March 26, there’s another 110 million bushels of what China has bought that we need to ship. If China buys some more soybeans as part of the May 14, 2025, trade agreement for the current marketing year, then maybe we can sustain something higher.

But, right now, I’m not real confident in that. We’ve shipped about 9 million metric tons and we have another 3 million metric tons to go yet to get that cleared up.

Here’s the good news: The year-to-date season crush exceeds the seasonal pace needed to hit USDA’s target by about 60 million bushels, and that strong RVO we just got should keep this strong all the way through the end of the marketing year.

In that RVO, we saw a 70% reallocation of the small refinery exemptions. We saw a strong basic RVO maintained for blending.

You add that reallocations to it for 2026, it comes to about 5.53 billion gallons up from 3.35 billion last year. For 2027, we’re looking at 5.75 billion gallons of production overall.