On March 31, 2015, USDA released its Prospective Plantings Report, as well as the Quarterly Grain Stocks Report. These were very highly anticipated USDA Reports, due to the uncertainty in grain prices in recent months, as well as with the potential for even larger increases in USDA estimated grain stocks in the coming year. Typically, these late March USDA 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 the key items from the March 31 reports.
Corn: Indicated intended corn planting acres of 89.2 million acres for 2015, which is down 2 percent from the 90.6 million planted acres in 2014, and is well below the 95.4 million acres in 2013 or the 97.2 million acres planted in 2012. The 2015 planted corn acres would represent the lowest U.S. corn acres since 2010. The total U.S. corn stocks on March 1, 2015, were listed at over 7.74 billion bushels, which is up 11 percent, compared to the 7.0 billion bushels on March 1, 2014, and is considerably higher than the 5.4 billion bushels of corn stocks on March 1, 2013. The March 1st USDA estimate is slightly above grain trade estimates prior to the Report.
Soybeans: Indicated intended 2015 soybean planted acres at 84.6 million acres, which is up 1 percent from the 83.7 million acres of soybeans in 2014, and is well above the 76.5 million acres planted in 2013. If achieved, the 2015 soybean acreage would be the highest in history, with acreage gains or stable acreage in 21 of the 31 major soybean producing states. Soybean stocks on March 1, 2015, were listed at 1.33 billion bushels, which up 34 percent, compared to just under 1 billion bushels on March 1, 2014. The March 1 soybean stocks estimate was slightly below the pre-report estimates by grain traders.
The State-by-State Prospective Plantings Report for 2015 is also rather interesting. Minnesota is one of the few major production states with an estimated increase in corn acres, with growers expected to plant 8.5 million acres of corn in 2015, which is 4 percent above the 8.2 million acres planted in 2014. Minnesota farmers are also expected to increase their planted soybean acres in 2015 to 7.5 million acres, which is up 2 percent from the 7.35 million acres of soybeans in 2014. Prospective plantings for 2015 in Iowa indicated 13.6 million acres of corn in 2014, which is down 1 percent from 13.6 million acres in 2014. The 2015 planted soybean acreage in Iowa is estimated at 10.1 million acres, which is up 2 percent from 9.9 million acres in 2014.
Prospective corn acres for 2015 in both Illinois and Indiana showed a 2 percent decrease, as compared to 2014 corn acreage, with expected 2015 corn acreage in Nebraska expected to be the same as in 2014. The corn acreage in South Dakota is projected to decline by 10 percent in 2015, with a 4 percent corn acreage decline in North Dakota, compared to 2014 planted acres. Both Illinois and Indiana are expected to have slight increases in soybean acreage in 2015; however, Nebraska is projected to have 6 percent decline in soybean acreage this year. South Dakota expects soybean acreage levels in 2015 to be similar to 2014, while North Dakota will likely see a 2 percent decline in soybean acreage in 2015. North Dakota is expected to have 2.7 million acres of corn and 5.8 million acres of soybeans in 2015, while South Dakota is projected to have 5.2 million acres of corn and 5.15 million acres of soybeans.
The March 31st USDA Grain Stocks Report indicated that as of March 1, 2015, there were about 4.38 billion bushels of corn and just over 609 million bushels of soybeans stored on farms in the U.S., which represents about 57 percent of the total corn stocks and 46 percent of the total soybean stocks. The March 1, 2015, on-farm grain stocks compare to 3.86 billion bushels of corn and 382 million bushels of soybeans in on-farm storage on March 1, 2014.
According to the USDA Report, there were 580 million bushels of corn and 72 million bushels of soybeans in on-farm storage in Minnesota on March 1, 2015, compared to 570 million bushels of corn and 59 million bushels of soybeans a year earlier in 2014. In Iowa, USDA estimated 910 million bushels of corn and 110 million bushels of soybeans in on-farm storage on March 1, 2015, compared to 710 million bushels of corn and 74 million bushels of soybeans on March 1, 2014.
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, 2015, may not be forward priced, as compared to a typical year, due to the drop in market prices following harvest in 2014. The large amount of corn and soybean bushels in on-farm storage, much of which is probably not priced, will likely make the grain market trends in the next few months very important for selling the remaining inventories, as well as for pricing the “new crop” 2015 corn and soybeans.