Grains: Eyeing US planting intentions for 2020 Grains: Eyeing US planting intentions for 2020 Grains: Eyeing US planting intentions for 2020

Grains: Eyeing US planting intentions for 2020

Commodities 3 minutes to read
Ole Hansen

Head of Commodity Strategy

Summary:  The grain market will turn to grain fundamentals from the macro economic developments later today when the US Department of Agriculture releases its Prospective planting 2020 report. Market surveys are looking for a bigger acreage allocation to corn and soybeans while wheat may settle for the lowest acreage on record.

What is our trading focus?

  • CBOT Wheat - WHEATMAY20
  • CBOT Corn – CORNMAY20
  • CBOT Soybeans – SOYBEANSMAY20
  • DBA:arcx – Invesco DB Agriculture Fund
  • AIGA:xlon – Wisdomtree Agriculture

The turmoil in global markets this past month have also impacted the agriculture sector. Grain and oil-seed futures together with cotton have seen elevated volatility with the impact of the Covid-19 being felt differently, depending on whether supply or demand has been the focus. Hoarding of wheat from stay at home consumers lifted wheat prices while pent up buying demand from China supported soy-meal buying towards livestock feed.

At the bottom of the table we see the negative spill over effect of the collapse in oil prices. Ethanol production accounts for around 39% of US corn demand and with gasoline prices and demand falling that trade has been negatively impacted. Cotton has also been hit as the cost of synthetic fibers, made from oil related chemicals, has fallen while clothes sales around the world has taken a major hit.

Source: Saxo Bank

Later today however the attention will, at least temporary, turn from macro-economic developments to crop fundamentals. At 16:00 GMT the US Department of Agriculture will release its prospective planting report for 2020. The report will show how US farmers intend to allocate their acreage between the different crops.

Surveys carried out by Reuters and Bloomberg both point to an increase in the corn acreage to a seven-year high while the soybean acreage is expected to hit the 3rd largest ever. The acreage allocated to wheat meanwhile is expected to drop to a record low below 45 million acre. Thereby continuing a forty year trend of lower acreage being allocated to wheat. This as competition from other regions, especially Europe, the Black Sea and Australia have shifted the focus towards soybeans due to Chinese demand and corn due to the mentioned ethanol production.

Recent developments may alter the these initial projections and leave the market response a bit more calm than seen in the past. From a speculative perspective wheat is the most vulnerable to a bearish outcome given the current price level and the recent buying. Corn and soybeans meanwhile both lingers near the bottom of their trading ranges and could find support should the acreage turn out lower than expected.

Source: Saxo Bank


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992