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Corn+Soybean Digest

U.S. Soybean Intentions Below Expectations

Tuesday morning’s annual USDA Prospective Plantings Report showed U.S. farmers intend to plant only 306,000 more acres of soybeans than they did a year ago, surprising a market that was generally anticipating an increase of about 3 million soy acres.

USDA pegged 2009 U.S. soybean planting intentions as of March 1 at 76.024 million acres, up from last year’s actual plantings of 75.718 million acres, but at the low end of trade estimates that averaged 79.539 million acres in a range from 75.9 million to 83 million.

USDA reported soybean-planting intentions increased by 100,000 acres or more for Arkansas, Iowa, Kansas, Mississippi, Nebraska, North Carolina, North Dakota and Ohio. The largest decreases are expected in Missouri and South Dakota, both 150,000 acres less than 2008. The planting intentions number should be supportive for soybean prices, even though U.S. soybean-planted acres would still be record large if the planting intentions are realized.

The threat of a huge increase in U.S. soybean production and ending stocks for 2009-2010 has been eased. Improved yields could still bring a record crop and a sizeable increase in stocks, but a repeat of last year’s yields would ensure tight stocks again, which means the market will be watching crop weather developments closely.

USDA’s corn planting intentions estimate came in below last year – as expected – but was slightly higher than the consensus of trade estimates. Corn plantings were expected to fall due to lower prices and high production costs. USDA pegged U.S. corn planting intentions at 84.986 million acres, down 1.2% from last year’s 85.982 million, but toward the high end of trade estimates that averaged 84.321 million acres in a range from 80 million to 89 million acres.

If the corn planting intentions are realized, corn acreage will decrease for the second straight year, but would still be the third largest since 1949, behind 2007 and 2008. USDA said expected corn acreage is down from last year in many states; producers in the 10 major corn-producing states (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota and Wisconsin) collectively intend to plant 66.3 million acres, up slightly from the 66.1 million acres they planted last year.

One big question everyone in the grain trade will be asking coming out of this report is where all the acreage has gone. According to USDA, producers intend to plant a total of 219.65 million U.S. acres to corn, soybeans and wheat in 2009. That’s a drop of more than 5.15 million acres, or 2.3%, from last year’s plantings. The averages of pre-report estimates indicated the grain trade was looking for corn/soybean/wheat plantings to total about 223.6 million acres. USDA at its annual Agricultural Outlook Forum held in late February forecast corn/soybean/wheat plantings of 221 million acres.

Planting intentions for the eight major field crops (corn, soybeans, wheat, cotton, rice, grain sorghum, barley and oats) are expected to be down 7.091 million acres, or 2.8%.

Planting intentions for "other" spring wheat were pegged by USDA at 13.304 million acres, down from last year’s actual plantings of 14.135 million and toward the low end of trade estimates that averaged 13.638 million acres in a range from 13.000-14.077 million. USDA put durum wheat planting intentions at 2.445 million acres, down from last year’s actual plantings of 2.731 million and in the lower half of trade expectations that averaged 2.626 million acres in a range from 2.2 million to 2.8 million.

U.S. all-wheat planting intentions totaled 58.638 million acres, down 6.8% from last year’s planted acreage, but only slightly below the average of trade estimates, which was 58.843 million acres. All cotton plantings for 2009 are expected to total 8.81 million acres, 660,000 acres, or 7%, below last year’s plantings and the lowest since 1983. However, cotton-planting intentions were above trade expectations, which averaged 8.32 million acres in a range from 7.8 million to 8.56 million acres. Grain sorghum planting intentions are down 16%, or 1.324 million acres, with barley intentions down by 7%.

The overall drop in planted crop acreage suggests producers have reacted more strongly to the sharp drop in crop prices and returns since last summer, combined with the overall weakness of the U.S. economy than was expected. However, the grain trade will likely be skeptical of the large decrease in plantings of major crops and is likely to anticipate that actual soybean plantings will exceed intentions.

The planting survey was taken with new-crop soybean prices near their lows and the recent rally of about $1 in November soybean prices that started on March 4 probably already bought some additional soybean acres

Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

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