March 31 Crop Report
On March 31, 2005, USDA released its Prospective Plantings Report and its Quarterly Grain Stocks Report. 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 for a calendar year sometime between April 1 and July 15.
Key items from the March 31 reports:
Corn – Indicated corn planting acres of 78.0 million acres in 2006, which is over 2.5 million acres below the average trade estimate of 80.6 million acres, and down from 81.7 million acres in 2005. The corn stocks on March 31 were listed at 6.98 billion bushels, which is up from stocks of 6.75 billion bushels in March of 2005.
Soybeans – Indicated soybean planting acres of 76.9 million acres in 2006, which is about 2.9 million acres above the average trade estimate of 74.0 million acres, and considerably above the 72.1 million acres of soybeans planted in 2005. Soybean stocks were listed at 1.67 billion bushels, which compares to 1.38 billion bushels in March of 2005.
Wheat – Indicated total wheat plantings for 2006 of 57.1 million acres, which is almost the same as the 57.2 million acres of wheat planted in 2005. The wheat stocks were listed at 972 million bushels, which again is very similar to the 984 million bushels in March of 2005.
Overall, the biggest surprise in the March 31 USDA reports was the high amount of the expected decrease in corn acreage (5 % lower than 2005 corn acreage), and rather significant increase in expected soybean acreage (7 % above 2005 soybean acreage) in 2006. This major acreage shift is mainly due to the rather dramatic increase in corn input costs for 2006, especially fertilizer and fuel expenses. The closing grain markets on March 31 on the Chicago Board of Trade showed resulted in an increase of 8 cents/bu. on December corn futures and a decrease of 12.75 cents/bu. on November soybeans. Just that one-day market difference changes the estimated gross income, with average yields, about $20/acre in favor of corn.
Editors 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].