Summary of USDA’s plantings and stocks reports
USDA released two major reports the end of last week, the annual Prospective Plantings report and the quarterly Grain Stocks report.
The Grain Stocks report shows stock levels as of March 1 and provides some insights into the pace of demand for the 2012/13 crop years. In general, the data in the report were pretty negative for corn, soybeans and wheat.
The Prospective Plantings report shows what farmers are planning to plant this spring for the 2013/14 crop year. Farmers can still change their minds, and spring weather almost always has an impact on actual crop acreage. Still, this report provides a pretty good guide to how crop acres might shift among the major crops. The data shows more sorghum and wheat acreage, and less cotton acreage for 2013. Corn and soybean acreages are pretty close to the same as actual 2012 acreage levels.
Farmers plan to boost corn acreage slightly in 2013, according to USDA’s Prospective Plantings report. The survey of farmers indicated total corn acreage of 97.282 million acres this year up 127,000 from the 2012 level. The planting intentions level is very close to what analysts had expected.
The average of the pre-report survey indicated corn acreage this year of 97.262 million acres, in a range from 96.8 million to 98.0 million. Earlier in the year, some forecasting groups forecast corn acreage above 100 million acres.
Corn acreage is generally lower in the heart of the Corn Belt, with acreage in Illinois down 600,000 acres and Indiana 150,000 acres lower. Farmers in Nebraska will cut corn acreage by 100,000 acres but farmers in Minnesota plan to boost acreage by 250,000 acres compared to the 2012 level. Farmers in drought stricken Kansas and Colorado plan to reduce corn acreage by 100,000 acres and 170,000 acres, respectively. Corn acreage will be up significantly, 500,000 acres, in North Dakota.
The biggest surprise out of all the USDA report data is the March 1 corn stocks figure. At 5.399 billion bushels, March 1 stocks are down 625 million from a year ago. However, stocks exceeded trade expectations by a whopping 400 million bushels. This falls into the category of a game changer for the old-crop corn outlook. It suggests that feed and residual use through the winter was much lower than expected and/or the 2012 corn crop is understated.
Feed and residual use for Dec.-Feb. is estimated at 1.084 billion bushels, down from 1.543 billion bushels in 2011/12. Total corn use for the quarter was 2.684 billion bushels, down 944 million bushels from a year ago to the lowest level for the quarter in ten years. Look for USDA to revise total feed and residual for the marketing year down 250 million bushels to near 4.3 billion in the next supply and demand update on April 10. Projected ending stocks will likely be revised up to near 900 million bushels. This alleviates much of the supply tightness, making the transition to new-crop much easier.