By Emily Balsamo
At a Glance
- Short-term Agricultural options can help traders manage price changes driven by USDA reports
- Last year, a 2.13% discrepancy between corn acreage estimates and the Prospective Planting report contributed to a rise in Corn futures prices
The Prospective Plantings report provides an important view into the upcoming crop year.
1. Prospective Plantings is Fundamental
Prospective Plantings, also known as Planting Intentions, is an annual report released by the USDA on the last business day in March. Prospective Plantings, next slated for release at 12:00 PM ET (11:00 AM CT) on Monday, March 31, 2025, reports on the season’s expected planted acreage for principal crops including corn and soybeans. The report also contains production data for the old crop. Compiled from a farmer survey regularly covering over 75,000 participants, Prospective Plantings is considered to be the early planting season’s most important view into the upcoming crop year.
2. Prospective Plantings Moves Markets
Economist polling and market expectation can heavily influence the price movement exhibited by relevant futures instruments following important USDA releases.
Prior to the release of significant USDA reports, estimates of select indicators are aggregated by market information providers, including LSEG/Refinitiv (formerly Reuters) and Bloomberg. There is an assumption among market participants that polling is widely respected and digested by the market pre-release, and thus polling values are “baked in” to relevant market pricing going into the report’s release.
Therefore, price movement post-release would be expected when polling values, which represent market expectation pre-release, differ significantly from the release values. Price movement should be directional depending on whether the difference between the actual and polling numbers represent an expansion or contraction of understood supply or demand, and price movement should be proportional to the degree of new information presented by the release.
For example, going into the March 28, 2024, Prospective Plantings report, Bloomberg median polling pinned Corn acreage at 92 million acres. When Prospective Plantings reported only 90,036,000 acres, Corn futures shot up. New crop (December 2024) futures rose as the national supply for the coming crop year was now assumed to be smaller than expectation, and old crop (May 2024) futures rose as last year’s grain was now assumed to be more valuable in light of the smaller-than-expected coming year.
May 2024 Corn futures on March 28, 2024, were the second most traded Corn futures instrument of the year, with 360,086 in total volume for that day. Only December 2024 Corn futures on June 28, 2024, the day of the USDA Acreage report, were more heavily traded in a single day, with 386,677 in total volume.
On the March 28, 2024, corn acreage surprise, front-month May 2024 Corn futures opened at 426’6, reaching 448’0 before closing at 442’0, covering a range of 22 cents over the day before the three-day Easter weekend.
By comparison, polling expectation for soybean acreage was much closer to the reported number on the March 28, 2024, Prospective Plantings report, and as a result, both old crop and new crop Soybean futures moved much less. While economists compiled by Bloomberg missed the mark by only 115,000 acres (0.13%) for soybeans, their projected number for corn acreage was off by more than 1.9 million acres (2.13%), demonstrated by a relatively proportional market impact.
3. New Weekday Options Allow Precision Exposure to This Year’s Report
With the launch of new Weekly options on Corn, Soybean, Soybean Meal, Soybean Oil and Chicago Wheat, market participants are better able to hedge exposure or express a precision view on events that move markets every trading day of the week.
Prospective Plantings will be released on Monday, March 31, 2025, at 12:00 PM ET (11:00 AM CT), the same day of expiry for the following Weekly Grains and Oilseed options.
Grains and Oilseed Options Expiring on Monday, March 31, 2025
|
Name |
Symbol |
Underlying Future |
|
Corn Monday Weekly Options – Week 5 |
5CA |
May 2025 Corn futures |
|
Soybean Monday Weekly Options – Week 5 |
5SA |
May 2025 Soybean futures |
|
Soybean Oil Monday Weekly Options – Week 5 |
5OA |
May 2025 Soybean Oil futures |
|
Soybean Meal Monday Weekly Options – Week 5 |
5MA |
May 2025 Soybean Meal futures |
|
Wheat Monday Weekly Options – Week 5 |
5WA |
May 2025 Wheat futures |
The USDA’s Prospective Plantings report plays a crucial role in shaping market expectations for the upcoming crop year, and Weekly options offer market participants one way to manage uncertainty around its release.
Original Post
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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