Tight global grain and oilseed supplies have created lucrative pricing opportunities for virtually every acreage allocation that farmers may be considering this year, triggering expansion signals. Combined corn, soybean and wheat acreage in 2021 (227.3M ac.) was the ninth highest on record.

Current trade guesses estimate that 2022 acreages could land somewhere between the sixth and eighth place in history in Thursday’s Prospective Planting report from USDA’s National Agricultural Statistics Service. The report will verify this expansion – or the bulls will greet it if acreage allocations fall short of market expectations.

A lot of trade estimates have consolidated closely to USDA’s 2022 Agricultural Outlook Forum preliminary forecast, issued in late February 2022. USDA does not use its standard farmer-based surveys to calculate the figures used in those estimates, opting for modeled forecasts based on economic assumptions. Additionally, this year’s data does not account for altered trade flows amid the Black Sea conflict.

To my mind, the lack of diverse trade estimates suggests that the rampant market volatility has created an uncertain environment which has made 2022 acreage forecasts more challenging for the industry this spring. The global uncertainty plaguing commodity markets will not last forever, but in the short term, it makes forecasting closer to USDA’s current estimates a safer bet.

Related:Dig into the latest USDA report

I’ve written at length about Farm Futures’ January 2022 and March 2022 surveys, which have both indicated high farmer sensitivity to soaring input prices. But timing is what matters most, according to our surveys.

2022 acreage forecasts

Even though 72% of surveyed farmers reported NPK applications for this spring, nearly 84% of growers were able to access the fertilizer in the form desired for the 2022 growing season. This suggests that farmers largely have the supplies on hand they need for planting, which would indicate that acreage allocations were decided likely closer to Christmas 2021 than in January or February 2022.

Only about 13% of farmer respondents in the March 2022 survey indicated that 50% or more of the grower’s crop acreage can change annually based on market fluctuations. Over 91% of growers do not expect 2022 crop rotations to deviate significantly from those of 2021.

I suspect that this dynamic will lead corn and soybean acreages to closely mirror each other in Thursday’s report. Our farmer survey favors soybean acreage (92.2M ac.) over that of corn (90.4M ac.) in 2022, as profit expectations for crops other than corn have soared on the Corn Belt’s fringes. I expect to see soybean prices take a hit on Thursday if USDA finds that soy acreage will indeed outpace corn acres in 2022. If that’s not the case, I think corn prices will hit price resistance in the face of higher 2022 corn acreage.

Related:Price volatility may not shake up 2022 acres

A boom in winter wheat acreage in Missouri, North Carolina and Ohio, plus acreage expansions in Texas, Kansas and the Dakotas will open opportunities for double crop rotations with soybeans in the coming months. A shrinking cattle herd on the Plains could also divert 2021 corn acreage to alternative options this year, such as sorghum, which has lucrative feed export prospects and could withstand current drought conditions in the region better than other crops.

But as high fertilizer prices begin to rise into higher territory following Russia’s unprovoked military invasion of Ukraine, acreage expansions for other lucrative crops could be at risk. Farm Futures’ spring wheat and cotton forecasts showed an uptick in 2022 acreage intentions, but growers’ responses came in slightly below USDA’s February 2022 forecasts. Durum acreage shrunk from 2021 sowings amid stiff competition from alternative crops. That could point to bullish results on Thursday if realized.

Chemical availability – or lack thereof – will be a constraining factor for 2022 production with 76% of growers expecting 2022 herbicide deliveries to be delayed due to ongoing supply chain issues. Paired with its soaring costs, I anticipate that it will be a limiting factor for cotton and rice production this year, which could boost prices on Thursday.

While farmers were hesitant to forecast fertilizer prices into 2023, 74% expect input prices will remain higher this spring than in Fall 2022. But one thing is clear – even if input prices do not end up significantly impacting 2022 acreages, they will likely be a key factor in the coming year’s acreage plans.

Global supply and weather considerations

With the global market uncertainty about grain and oilseed supply availability in 2022, I expect domestic stocks to remain tight. While a (hopeful) return to normal weather patterns could help to boost production at home, current wheat condition ratings suggest that we still aren’t in the clear from completely avoiding a second consecutive year of wheat shortfalls.

A second straight year of La Niña weather patterns is expected to keep drought forefront across the Plains, adding doubts to yield potential regardless of acreage outlays. Meanwhile, the Eastern Corn Belt is likely to see another wet spring which could make for spotty planting progress.

Favorable planting conditions in the Upper Midwest could be the deciding factor for corn acreage to surpass soybeans this year. But as dry weather continues to plague the region, that is a variable that remains largely unknown, adding to the widespread market uncertainty ahead of Thursday’s reports.

Soil conditions are already prime for planting in Kansas and the Southern Plains. Syngenta’s GreenCast tool (Nerd alert – I’ve been obsessed with following it for my lawncare plan. I’m in the peak pre-emergent application window, for context. Not a sponsor – yet!) shows soil temperatures approaching the 50–55-degree window in Nebraska, South Dakota and Missouri as of Tuesday.

Soil temperatures in the Upper Midwest and much of the Eastern Corn Belt still have a way to warm up. Southern Illinois and Indiana soils are currently measuring 40 degrees, but everywhere north of that region registers 35 degrees or lower.

Cooler atmospheric temperatures are afoot for the rest of the week, which could thwart any chance of a quick rise in soil temperatures across the Heartland. NOAA’s 6- to 10-day weather outlook predicts moderate temperatures next week and an above-average chance for rainfall to the east of the Rocky Mountains.

Sunny days and warm showers are still needed to pull the U.S. Heartland into peak planting mode over the next two weeks. But those days are not likely far away.

Quarterly grain stocks

As Farm Futures contributing grain analyst Bryce Knorr points out, there is typically not as much market response to the Quarterly Grain Stocks portion of Thursday’s USDA reports. “Supply estimates won’t change much: 2021 crop production usually isn’t updated until the end of September, if then, and stocks at the beginning of the marketing year – 2020 crop ending stocks – are also fixed,” Knorr forecasts in a recent Ag Marketing IQ column.

For corn and soybeans, the data will represent the usage rates for each commodity through the first half of the 2021/22 marketing year (September through February). For wheat, the stocks and usage data encompass three quarters of the current marketing season (June – February).

USDA will likely issue revisions to previous stock readings, as the agency typically receives late information and updates the numbers to ensure accuracy when reconciled with current economic trends.

Corn, soy, and wheat consumption rates

Historically, corn usage rates for the December – February period jockey with third quarter consumption for the second largest quarterly consumption volumes of a marketing year. Analyst estimates are expecting lower usage rates for Thursday’s report, as peak export season typically will not accelerate corn disappearance until late February.

A smaller cattle herd could also keep corn supplies on the high side of analyst estimates. The wild card for corn in Thursday’s report? Corn consumption for ethanol.

Record holiday travel helped spur expansion signals for ethanol producers, who have largely returned to producing pre-pandemic fuel additive volumes. Estimated corn consumption for ethanol production is over 13% higher annually in the December – February period for the current marketing year. If there are any surprises to be had from quarterly corn stocks, the ethanol complex is where they will be found.

Soybean usage rates are also likely to come in on the low end of analyst estimates in Thursday’s report. To be sure, soybean export paces in December and January were 25% lower relative to a year prior, which could result in a higher soybean stock reading on Thursday – a bearish factor.

But steady domestic usage rates could help offset sluggish export volumes. National Oilseed Processors Association crush estimates for December – February are 2% higher than the same time last year as tight global edible oil supplies and increasing biofuel demand trigger expansion signals for soybeans.

The trade isn’t expecting much here, so any indication of increased soybean usage (lower stock readings) during the December – February period could be bullish for soybeans. It will indicate how strong domestic demand has risen and supply availability for a potential late season export push due to South American crop shortfalls.

Wheat supplies will land on the low side of historical estimates in Thursday’s report because of last summer’s spring wheat shortfall in the Northern Plains and Pacific Northwest. We are expecting another quarter of low domestic wheat usage as high prices limit feed demand and export interest.

USDA has already indicated in the March 2022 World Agricultural Supply and Demand Estimates report that wheat growers have already sold most of their 2021 wheat crops. This suggests that on-farm wheat stocks will likely be on the low end on Thursday’s report.

Bear in mind, that these stock readings and consumption rates will be current as of March 1. This means that little market volatility from the Ukrainian conflict will be factored into this data since the war and ensuing sanctions began in the closing days of February.

Regardless, Thursday’s reports will provide the most comprehensive look at 2021/22 supplies and USDA’s best guess of 2022/23 supplies amidst a wide array of unknowns in the fallout of the Black Sea conflict.

Our Farm Futures team will have live coverage and analysis of USDA’s reports following their release at 11 A.M. CDT on Thursday, March 31, 2022. Stay tuned to our website (FarmFutures.com) or our social feeds (@FarmFutures) for the latest updates.

Plus, I will be a guest on a Farm Progress 365 web event at 1 P.M. CDT following USDA’s reports release on Thursday where I will provide analysis and insights from the acreage and grain stocks updates. Join us by registering at this link and feel free to ask me any questions you may have about the reports.