On March 31, 2010, USDA released the Prospective Plantings and Quarterly Grain Stocks reports. These were very highly anticipated reports, due to the uncertainty in grain prices in recent months, as well as with USDA estimated grain stocks that existed on March 1.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.
Here are highlights from the March 31 reports:
Corn – Indicated intended corn planting acres of just over 88.8 million acres for 2010, which is up 3% from the 86.5 million acres in 2009, and up from 86 million acres in 2008, but is still well below the 93.6 million acres in 2007. The corn stocks on March 1, 2010, were listed at 7.69 billion bushels, which compares to 6.95 billion bushels on March 1, 2009, and 6.85 billion bushels in 2008.
Soybeans – Indicated intended soybean planting acres of 78.1 million acres in 2010, which is up slightly from the 77.5 million acres of soybeans in 2008, and is up considerably from the 74.8 million acres of soybeans planted in 2008. Soybean stocks on March 1, 2010, were listed at 1.27 billion bushels, which compares to 1.30 billion bushels on March 1, 2009, and 1.43 billion bushels on March 1, 2008.
Wheat – Indicated intended total wheat plantings for 2009 of 53.8 million acres, which is down 9% from 59.1 million acres in 2008, and down 16% from the 63.8 million acres of wheat planted in 2008. The wheat stocks on March 1, 2010, were listed at 1.35 billion bushels, which is up 23% from the 1.04 billion bushels of wheat on March 1, 2009.
Cotton – Indicated intended cotton plantings of 10.5 million acres for 2010, compared to 9.1 million acres in 2009, and 9.4 million acres of cotton planted in 2008.
The state-by-state Prospective Plantings report for 2010 is also rather interesting. In Minnesota, growers are expected to plant 7.6 million acres of corn in 2010, which is exactly the same as 2009, but is down slightly from 7.7 million acres in 2008. Minnesota farmers are expected to plant 7.2 million acres of soybeans in 2010, which is also the same as 2009, but is higher than the 6.05 million acres in 2008. Prospective plantings for 2010 in Iowa showed a slight decrease in corn acreage and slight increase in soybean acreage, as compared to 2009.
Prospective crop acres for 2010 in Illinois, Indiana and Nebraska showed slight increases in corn and soybean acreage, as compared to 2009 acreage. Some states expected to have the largest percentage increase in corn acreage in 2010 are Kansas, Ohio and North Dakota, while Texas, Oklahoma and Kansas are expected to have the largest percentage increases in soybean acres. Most of the added corn and soybean acreage in those states in 2010 will be the result of lower planted wheat acreage this year.
The reports for 2010 corn and soybean acreage were slightly below the acreage estimates released by most private grain marketing analysts, and USDA wheat acreage estimates were slightly higher than the estimates released by the private analysts. Many analysts feel that there are still a lot of undecided corn and soybean acres in the upper Midwest, depending on weather and price movements in the next few weeks. It will be interesting to see if the unusually nice weather in late March and early April in the Midwest has any impact on spring planting decisions. However, we are not likely to see major shifts in 2010 corn and soybean acreage in the coming weeks, as most farmers in the Upper Midwest locked-in their seed, fertilizer and chemical needs for the 2010 crop season several months ago.
The Grain Stocks Report indicated that as of March 1, there were just over 4.5 billion bushels of corn and 609 million bushels of soybeans stored on farms in the U.S. This compares to just under 4.1 billion bushels of corn and 656 million bushels of soybeans in on-farm storage on March 1, 2009. According to the USDA report, there were 670 million bushels of corn and 88 million bushels of soybeans in on-farm storage in Minnesota on March 1, 2010, compared to 520 million bushels of corn and 90 million bushels of soybeans on March 1, 2009.
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, 2010, are not forward priced, as compared to a year earlier. The large amount of corn and soybean bushels in on-farm storage that are not priced make the grain market trends in the next two to three months very critical for 2010 farm profitability in the Upper Midwest.
Editor’s 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@example.com.