(AgriView) – Both of USDA’s long-awaited Prospective Plantings and Grain Stocks reports, released on Monday this week, were bullish for corn, according to Mark Welch, Texas A&M University grain marketing specialist.
Corn acreage for all purposes in 2014 is estimated at 91.7 million acres, down 4 percent from last year. If realized, this will be the lowest number of corn acres planted in the U.S. since 2010. But it’s still the fifth largest corn acreage since 1944.
Soybean planted area for 2014 is estimated at a record high 81.5 million acres, up 6 percent from last year.
All wheat planted area for 2014 is estimated at 55.8 million acres, down 1 percent from last year. The 2014 winter wheat planted area, at 42 million acres, is down 3 percent from last year but up slightly from the previous estimate.
Wisconsin farmers intend to plant 4.1 million acres of corn for all purposes this spring. That is unchanged from 2013. Badger State growers intend to plant 1.75 million acres of soybeans, an 11 percent jump from last year, and if realized, Wisconsin’s highest soybean planted acreage on record.
Winter wheat in Wisconsin is estimated at 290,000 acres, an 8 percent drop from last year. Farmers say that they want to plant oats on 260,000 acres in the state, 5,000 more than last year. Dry hay acreage at 1.6 million would be the same as last year.
“The USDA’s much anticipated estimates of Mar. 1 grain stocks and 2014 planting intentions…contained a few surprises, but no major shocks,” says University of Illinois grain market analyst Darrel Good. “March 1 corn stocks and planting intentions are a bit smaller than the average trade guess. March 1 soybean stocks were almost equal to the average trade guess, while planting intentions are slightly larger than expected.”
Corn stocks up 30 percent from March 2013
Corn stocks in all positions on Mar. 1 totaled 7.01 billion bushels, up 30 percent from the same time last year. Of the total stocks, 3.86 billion bushels are stored on farms, up 45 percent from a year earlier. Off-farm stocks, at 3.15 billion bushels, are up 15 percent from 1 year ago.
The December 2013 to February 2014 indicated disappearance is 3.45 billion bushels, compared with 2.63 billion bushels during the same period last year.
Here in Wisconsin, corn stocks in all positions totaled 221 million bushels on Mar. 1, off 3 percent from last year. Fifty-seven percent are stored on-farm. The state’s indicated disappearance from December 2013 through February this year is 118 million bushels, 11 percent more than the same period last year.
Welch says U.S. corn stocks were below the average trade estimate of 7.099 billion. Corn consumption for the quarter ran above the average pace of consumption for that time period.
“Stocks are well above the drought lowered levels of a year ago, but the gap between this year’s stocks and the 5 year average is narrowing,” he notes.
Welch says, “planting intentions and stocks reports combine with livestock inventory numbers that are bullish for corn. “Stocks are tighter, plantings lower, and cattle and hog numbers higher than expected.”
Soybeans stored in all positions in the U.S. March 1 totaled 992 million bushels, down 1 percent from Mar. 1, 2013. Soybean stocks stored on farms are estimated at 382 million bushels, down 16 percent from 1 year ago. Off-farm stocks, at 610 million bushels, are up 13 percent from last March. The December 2013 to February 2014 indicated disappearance totaled 1.16 billion bushels, up 20 percent from the same period 1 year earlier.
Wisconsin soybeans in all positions Mar. 1 totaled 19.6 million bushels, down 25 percent from 26.3 million on hand last year at the same time. Thirty-three percent were stored on-farm. Indicated disappearance for the quarter is 28.7 million bushels, which is 8 percent more than the same quarter last year.
All wheat stored in all positions Mar. 1 totaled 1.06 billion bushels, down 15 percent from a year ago. On-farm stocks are estimated at 238 million bushels, up slightly from last March. Off-farm stocks, at 818 million bushels, are down 18 percent from 1 year ago. December 2013 to February disappearance is 419 million bushels, down 4 percent from the same period 1 year earlier.
“Reports…were mixed for wheat, stocks higher than expected, acres lower. In addition to fewer acres, the condition of the hard red winter wheat crop in the southern High Plains worsened again this week,” Welch reports. “U.S. wheat stocks continue to run below last year and the 5-year average. Wheat acreage was reported as 55.815 million. Trade expectations were for an increase over last year’s 56.156 million to 56.277 (million). More critical to wheat production in 2014 than planted acres will be the deteriorating condition of much of the U.S. hard red winter wheat crop.”
Welch says he has priced 20 percent of insured wheat production for 2014 in his marketing plan.
“My marketing plan calls for pricing the final 20 percent in the April to mid-May time period. I also am keeping an eye on July 2015 wheat futures. If this rally continues and I have sold all of my 2014 crop, I may take this opportunity to price another year out,” he notes.
Good, in Illinois, says the largest declines in corn plantings are planned in North Dakota (900,000), Nebraska (550,000) and South Dakota (400,000). Intentions in Iowa are for a 400,000 acre increase in corn acreage.
Compared with last year’s plantings, intentions are down 100,000 acres in Illinois and 200,000 acres in Indiana and Ohio.
He says planting intentions point to harvested acreage for grain of about 84.4 million acres. A trend yield of 163.2 bushels, then, would result in a crop of 13.775 billion bushels, 150 million bushels smaller than the 2013 crop. A crop of that size would probably lead to only a small build-up of inventories by the end of the 2014-2015 marketing year and suggests that the average corn price next year might be only slightly less than the average of $4.50 projected for the current year.
More soybean acres are planned in all major states, with North Dakota leading the way with a 1 million acre increase. Intentions exceed last year’s plantings by 700,000 acres in Minnesota and by 600,000 acres in North Dakota. Of the major production states, intentions are less than last year’s plantings only in Missouri.
Planting intentions point to harvested acreage near 80.7 million. A trend yield of 44.5 bushels, then, would point to a crop of 3.59 billion bushels, 300 million bushels larger than the 2013 crop. A crop of that size would probably lead to inventories in excess of 300 million bushels by the end of the 2014-2015 marketing year and suggests that the average soybean price next year will be sharply lower than the average of $12.95 projected for the current year.
