Just as farmers are readying their fields for spring plantings and hoping for good weather, they could encounter some surprises tucked away in USDA's Prospective Plantings Report released on March 31.
Growers may factor trade expectations or financial limits into their planting decisions, and an unexpected change in acreage estimates also could impact their calculations, according to analysts.
A limited number of private estimates published so far predict increased corn acres over soybeans, “but in turn, bean acres are possibly going into lost wheat acres,” according to Dan Hueber of The Hueber Report.
“Possibly the largest risk could come with a larger-than-expected bean acreage number, but even if that were the case, with all the weather and production risk ahead, I would not expect a long-lasting impact,” Hueber said.
Farmers should keep in mind that the survey for the Prospective Plantings report was taken around March 1, so this week’s data will not reflect damages to hard wheat or problems with wet planting conditions in the Deep South, according to Hueber.
Alan Brugler, president of Brugler Marketing in Omaha, also reminded farmers that the plantings report is in some ways a “rear view mirror.”
“It was written when prices were lower than they are now,” Brugler cautioned. Now that weather is on the drier side, conditions might be more favorable for planting more corn, perhaps a total of 90 million to 91 million acres worth, he said.
He’s keeping a watch on some wild cards, though. An early, dry spring could get farmers into the fields earlier and result in more acres; growers might also cut back on their planting due to low prices.
Jerry Gulke, president of the Gulke Group in Chicago, also thinks there could be more corn acres this spring. “There’s a lot of people in Iowa and Illinois and South Dakota who had pretty good crops for the last couple of years, and so the thinking is that if prices go lower, (they)can make it up in yield,” he said. “…Yield has been higher for corn than for soybeans, so the report might reflect a change in acreage.”
Brian Basting, of Advance Trading in Bloomington, Ill., also estimates that corn plantings will trump soybean acreage, but notes that “the report is always a surprise.”
He expects corn plantings to be between 90 million acres and 91 million acres, and soybeans virtually unchanged at 82.5 million acres.
“A surprise would be any (corn acres) above 90 million. For soybeans, it would be a surprise if it were one million acres higher,” Basting said.
Others believe the plantings report won’t be much of a news maker this year. “I don’t think it will be a market mover,” said Rich Nelson, chief strategist of Allendale in McHenry, Ill.
Allendale’s own estimates put corn at 90.431 million acres, soybeans at 82.575 million acres, and wheat at 51.769 million acres.
“The market should be quiet on the acreage side,” Nelson predicted. “The bigger issue will be yield.”