The latest USDAProspective Plantings report wasn’t much of a surprise, as wheat acres remained down substantially. All wheat planted area is estimated at 53.8 million acres, down 9% from 2009. The 2010 winter wheat planted area, at 37.7 million acres, is 13% below last year but up 2% from the previous estimate.
The bearish news in the corn and soybean reports immediately slashed the wheat market by more than 21¢, down to $4.64/bu. in Chicago. Kansas City wheat dropped about 17¢ to $4.73.
The direction of the market remained depressed Thursday and Friday, providing further evidence that wheat prices, although still highly volatile, are likely to remain under pressure into late spring.
Of total wheat acres, about 28.3 million acres are hard red winter, 6 million acres are soft red winter and 3.4 million acres are white winter. Area planted to other spring wheat for 2010 is estimated at 13.9 million acres, up 5% from 2009. Of this total, USDA says about 13.3 million acres are hard red spring wheat. Durum planted area for 2010 is estimated at 2.22 million acres, down 13% from the previous year.
"The big decline in wheat acreage is really coming from the fall-seeded crops," says Chris Hurt, Purdue University Extension economist. "Two things are going on there. One was very low returns and poor prices for wheat prospects and, secondly, extremely wet weather for the harvest season in 2009. We just didn't get the wheat in the ground.
"In Indiana (for example) we saw wheat acreage at the lowest level in recorded history, just 300,000 acres. That gave rise, then, to the ability to plant more corn and soybeans. We see a very similar pattern in neighboring states. Just two years ago, wheat acreage was on the rise. Indiana farmers that year planted around 600,000 acres.”
On the corn side, USDA says growers intend to plant 88.8 million acres of corn for all purposes in 2010, up 3% from both last year and 2008. Expected acreage is up in many states due to reduced winter wheat acreage and expectations of improved net returns. Acreage increases of 300,000 or more are expected in Illinois, Kansas, Missouri and Ohio. The largest decreases are expected in Iowa, down 200,000 acres, and Texas, down 150,000 acres.
Soybean producers intend to plant 78.1 million acres in 2010, up less than 1% from last year. If realized, the U.S. planted area will be the largest on record. Acreage increases of 100,000 or more are expected in Illinois, Iowa, Kansas, Nebraska, North Dakota and South Dakota. The largest decreases are expected in Georgia and North Carolina, both
150,000 acres less than 2009. If intentions are realized, the planted acreage in Kansas, North Dakota and Pennsylvania will be the largest on record.
All cotton plantings for 2010 are expected to total 10.5 million acres, 15% above last year. Upland acreage is expected to total 10.3 million acres, up 15%. Melvin Brees, University of Missouri Extension economist, says the decrease in corn and soybean prices seen after the report were likely caused partially by the corn and soybean stocks report.
“March 1 corn stocks are up 11% from last year. Corn stocks in all positions were 7.69 billion bushels,” says Brees. “Although this is within the range of prereport trade expectations, it was above the average trade estimate of 7.5 billion bushels. Soybean March 1 stocks were 1.27 billion bushels and this was at the top end of the prereport range of trade estimates (1.16 to 1.27 billion bushels).
“Wheat stocks of 1.35 billion bushels were near the average prereport trade estimate of 1.36 billion bushels. The intended corn and soybean acreages were not out-of-line with trade expectations but the big news in these reports is the larger-than-most-expected corn and soybean stocks. March 1 corn stocks are above the average of trade estimates and increased over last year, suggesting corn supplies are more than adequate.
“Although March 1 soybean stocks are 2% below last year’s stocks, they were higher than most expected at the top end of trade expectations and at the time of year when export demand is expected to slow. Most analysts consider this bearish news and expect the stocks information to lead to lower corn and soybean futures prices.”