Corn and soybean futures closed lower while wheat came out mixed in overnight trade.
The USDA report showed American farmers are expected to plant much more soybean, a record 88mac, and cotton than last year as prices dictate acres sown. Corn area is expected to remain stable at about 90 million acres. The biggest headwind for US corn going forward will be larger stocks in S.America and trade hurdles to Mexico if they turn out to be more than just media hype. US soybean export numbers are starting to wane as Brazilian and Argentine stocks come online giving Asian buyers an alternative.
In wheat we see the HRW contract slowly returning to a more traditional spread to SRW and spring wheat enjoying support from strong US export numbers. All wheat acres in the States this year are expected to remain historically low at 46mac. Spring wheat is projected at around 11mac and durum at 2.3mac. The latest vegetation maps show US HRW breaking dormancy early this year, this could leave the crop open to a spring frost, the last big one we saw in April 1996.
Not to be outdone by the USDA the European based IGC released their monthly stab at the world grain S&D. The IGC noted increases in world wheat stocks thanks to a huge Aussie crop. Even as major producers prune acres back the IGC still see world wheat production for 2017 coming in around 735mt. With wheat profits falling some punters think the IGC is too high. For instance on the weekend Canadian prospects were reduced further and the rise in value of the rubble is also expected to prune Black Sea acres.