On March 30, USDA released its Prospective Plantings and Quarterly Grain Stocks reports. These were very highly anticipated USDA reports, due to the uncertainty in grain prices in recent months, as well as with the tight USDA estimated grain stocks that existed on March 1.Typically, these late-March reports are very critical to farm operators and grain traders because these reports tend to have a high impact on grain market prices in the spring and early summer. This is the time of the year when many farm operators try to sell remaining grain inventories from the previous growing season, as well as look for opportunities to forward price a portion of the anticipated crop for the current year. In a majority of years, corn and soybean prices usually reach their peak price in the spring months, from April until June. Following are key items from the March 30 reports.
Indicated intended corn planting acres of 95.9 million acres for 2012, which is up 4% from the 91.9 million planted acres in 2011, and up 9% from 88.2 million acres in 2010. If achieved, the 2012 planted corn acres would be the highest since 1937, when 97.2 million acres were planted. The corn stocks on March 1, 2012, were listed at 6.01 billion bushels, which is down 8% from the 6.52 billion bushels on March 1, 2011, and down 22% from 7.69 billion bushels in 2010.
Indicated intended soybean planting acres of 73.9 million acres in 2012, which is down 1% from the 75.0 million acres of soybeans in 2011, and down 5% from the 77.4 million acres planted in 2010. Soybean stocks on March 1, 2012, were listed at 1.37 billion bushels, which is slightly higher than the 1.25 billion bushels of soybean stocks on March 1, 2011, or the1.27 billion bushels on March 1, 2010.
Indicated intended total wheat plantings for 2012 of 55.9 million acres, which is up 3% from 54.4 million acres in 2011, and 4% above the 53.6 million acres of wheat planted in 2010. The wheat stocks on March 1, 2012, were listed at 1.20 billion bushels, down 16% from the 1.42 billion bushels of wheat on March 1, 2011.
Indicated intended cotton plantings of 13.2 million acres for 2012, down 11% from 14.7 million acres in 2011, but still well above the 10.9 million acres of cotton planted in 2010.
The state-by-state Prospective Plantings Report for 2012 is also rather interesting. In Minnesota, growers are expected to plant 8.7 million acres of corn in 2012, which is up over 7% from the 8.1 million acres planted in 2011, and almost 13% higher than the 7.7 million acres planted in 2010. Minnesota farmers are expected to plant 6.9 million acres of soybeans in 2012, down about 3% from the 7.1 acres of soybeans in 2010, and down almost 7% from the 7.4 million soybean acres planted in 2010.
Prospective plantings for 2012 in Iowa indicated 14.6 million acres of corn in 2012, up 3.5% from the 14.1 million acres planted in 2011, and planted soybean acreage at 8.8 million acres in 2012, down 5% from the 9.3 million acres in 2011.
Prospective crop acres for 2012 in Nebraska and Indiana showed increases in corn acreage, and slight decreases in soybean acreage, as compared to 2011 acreage, while Illinois was the only major Corn Belt state that is projecting a slight decrease in corn acres and a slight increase in soybean acreage in 2012. Both North and South Dakota are estimated to have increased corn and soybean acreage in 2012, with North Dakota expected to have a 52 percent increase in corn acreage, compared to a year earlier.
The report for 2012 intended planted corn acreage of 95.9 million acres exceeded the average pre-report grain trade estimate of 94.7 million acres. The expected 2012 soybean acreage of 73.9 million acres was well below he average pre-report grain trade estimate of 75.5 million acres, while the USDA projected wheat planting acres for 2012 are 55.9 million acres, compared to the pre-report grain analyst average estimate of 57.6 million acres.
Many analysts feel that there are still a lot of undecided corn and soybean acres in the Upper Midwest, depending on weather and price movements in the next few weeks. It will be interesting to see if the current strength in the soybean market, as compared to new-crop corn, has any impact on spring planting decisions. However, we are not likely to see major shifts in 2012 corn and soybean acreage in southern and western Minnesota in the coming weeks, as most farmers had already locked-in their seed, fertilizer and chemical needs for the 2012 crop season several months ago.
The March 30 Grain Stocks Report indicated that as of March 1, there were just under 3.2 billion bushels of corn and 555 million bushels of soybeans stored on farms in the U.S. This compares to just over 3.4 billion bushels of corn and 505 million bushels of soybeans in on-farm storage on March 1, 2011. According to the report, there were 440 million bushels of corn and 72 million bushels of soybeans in on-farm storage in Minnesota on March 1, 2012, compared to 600 million bushels of corn and 89 million bushels of soybeans on March 1, 2011.
USDA does not survey the percentage of the bushels in on-farm storage that are forward priced for future delivery, as compared to bushels that are not priced. However, many private analysts feel that a much higher percentage of the corn and soybean bushels still in storage on March 1, 2012, may be forward priced, as compared to typical years. The large amount of corn and soybean bushels in on-farm storage that is likely already forward priced, makes the grain market trends in the next few months much more critical for the 2012 new-crop corn and soybeans than for remaining 2011 grain inventories..
Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at [email protected]