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Jun 28, 2021

USDA Acreage Expectations

Report could be very supportive for prices through summer and into harvest

USDA Acreage Expectations

  • Corn area is expected to be 93.8 million acres compared to intentions for 91.1 million and 90.8 million last year.

  • FBN’s survey expects 92.9 million acres, near the low end of the range of expectations of 92 - 95.84 million.

  • Bean acres are on average seen at 88.9 million, up from the March intentions of 87.6 million acres and 83.1 million last year.

  • FBN’s survey of 86.5 million acres is below the lowest pre-report estimate which range 87.9 - 90.4 million acres.

  • The planted area of spring wheat is expected to be 11.4 million acres, down from 11.74 million acres in March and 12.25 million last year.

  • FBN has projected spring wheat acres slightly above intentions at 11.9 million acres.

  • In cotton, the average estimate is 11.856 million acres, within a range of 11.5 million to 12.4 million acres.

  • FBN has forecast cotton acres to be nearly unchanged from the March intentions at 12.036 million versus 12.093 million last year.

FBN’s Take On What It Means: All eyes will be on the acreage figures on Wednesday. The largest surprise could be in beans, where no analyst has reported an expected figure below the March intentions. If FBN’s forecast is realized, given the very thin margins for stocks in the coming year, it could be very supportive for prices through the summer and into harvest.


Supreme Court Finds In Favor of Refineries

  • On Friday, the Supreme Court made it easier for small oil refineries to receive exemptions from required blending of renewable fuels into their products.

  • The Renewable Fuels Association had sued the EPA, arguing that the agency had overstepped its authority in granting these waivers in the past.

  • A lower court decision agreed with RFA, however upon appeal, the Supreme Court has sided with EPA.

  • It’s been reported there are over 30 waiver requests pending that were on hold awaiting the Supreme Court outcome.

  • The market for ethanol RINs fell sharply from $1.66 to $1.35 per gallon, but has stabilized in the $1.45-1.50 range.

  • RIN prices effectively represent the cost of compliance for those who do not meet their assigned blending requirements.

  • Corn, Beans, and especially bean oil prices also came under pressure following the news release.

FBN’s Take On What It Means: There is uncertainty over the status of hardship waiver requests that are currently pending a decision from the EPA. It’s also unclear how the EPA will now respond to future hardship waivers and whether the court’s decision will lead to a softening of RFS mandates. The decision could have some effect on the next Renewable Volume Obligations from the EPA that are due in July which will give guidance on 2021 and 2022 compliance.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

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Kevin McNew

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Marketwatch: Dec, 04

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.6684
high: 5.7321
low: 5.6559
close: 5.7046

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 12.266
high: 12.366
low: 12.2585
close: 12.34

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.1277
high: 8.243
low: 7.9921
close: 8.0144

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.6225
high: 7.7249
low: 7.4749
close: 7.5391