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Frontrunner - 1st April 2021

On Wednesday 31ST March, the United States Department of Agriculture (USDA) published its quarterly US stock and acreage report. It contained bullish data for corn that triggered a sharp price rally for Chicago Board of Trade (CBOT) corn futures, sending them to new contract highs; the highest level seen since 2013. Despite the report having bearish wheat data, wheat futures followed corn futures higher, ending the recent slide in prices that had dropped to a three-month low prior to the report.

In recent weeks, analysts have been very upbeat about US famers reacting to high corn prices and significantly increasing the corn area they plant this spring. Estimates have been as high as 94 million acres compared to 90.8 million acres last year. At its Outlook Forum in February, the USDA saw US farmers planting 92 million acres of corn. Average trade guesses before the report were 93.28 million acres. However, in the report, the USDA has revised its estimate with only a small increase on the year, bringing the new predicted acreage to 91.144 million acres. Using trend line yield data, this would leave 2021 US production short of expected domestic and export demand, cutting stocks and leaving a bullish outlook. US quarterly corn stocks estimates were also bullish, seen at 7.701 billion bushels, which is below average trade guesses and down 3% on the year. 

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