USDA: More corn acreage, less soybeans

With many crop marketing analysts portraying the 2011 planting season as “acreage wars,” two of the more highly anticipated USDA reports were released on Thursday, March 31: The Grain Stocks report estimated current grain inventories; and a Planting intentions report providing a glimpse of what farmers intend to plant this spring.

Indications are that corn is the early leader in the battle for acreage. USDA forecasts growers intend to plant  92.2 million acres of corn in 2011, up 5% from last year and 7% more than 2009. If realized, it would be the second largest area planted to corn since 1944, behind only 2007’s 93.5 million acres.

Acreage increases of 250,000 or more are expected in Iowa, Kansas, Nebraska, North Dakota, Ohio, and South Dakota. The largest decrease is expected in Texas, down 150,000 acres.

Soybean planted area for 2011 is estimated at 76.6 million acres. While down 1% from last year, it would still be the third largest on record. Compared with last year, planted acreage declines of 100,000 acres or more are expected in Iowa, Kansas, Mississippi, Nebraska, and Ohio. If realized, the planted area in New York and North Dakota will be the largest on record.

Looking at the Grain Stocks report, corn stored in all positions on March 1 was estimated at 6.52 billion bushels, down 15% from a year ago. Of the total stocks, 3.38 billion bushels are stored on farms, down 26% from a year earlier. Off-farm stocks, at 3.14 billion bushels, are down slightly from a year ago. The December 2010-February 2011 indicated disappearance is 3.53 billion bushels, compared with 3.21 billion bushels during the same period last year.

Soybeans stored in all positions on March 1 totaled 1.25 billion bushels, down 2% from March 1, 2010. Soybean stocks stored on farms are estimated at 505 million bushels, down 17% from a year ago. Off-farm stocks, at 744 million bushels, are up 13% from last March. Indicated disappearance for the December 2010-February 2011 quarter totaled 1.03 billion bushels, down 4% from the same period a year earlier.

Estimated corn acreage came in somewhat higher than many market analysts had predicted, but corn inventories came in slightly lower. Soybean acreage and stocks estimates came in slightly lower than many forecasts, so we’ll probably see some futures price reaction as the week closes.

The Planting Intentions report provided good news for dairy producers who feed cottonseed. All cotton plantings for 2011 are expected to total 12.6 million acres, 15% more than last year and increasing in every cotton-growing state. The largest increase, at 548,000 acres, is expected in Texas. Acreage increases of more than 100,000 acres are expected in North Carolina, Georgia and Mississippi.

 

Responses, reactions

The Renewable Fuels Association (RFA) provided early reaction to the Planting Intentions report, noting corn and wheat numbers are higher than the trade expected, while the soybean number is slightly below the average trade estimate.

Based on this acreage estimate, RFA said corn yields would need to average 159.7 bushels per acre to maintain current carry-out levels. To increase carry-out stocks to near 1 billion bushels, an average yield of 163.5 bushels per acre would be needed.

“Such a yield is entirely possible and in line with trend yield growth from the last 15 years,” according to an RFA release. “In 2009, American farmers set the all-time yield record at 164.7 bushels per acre. (USDA’s) acreage estimate clearly shows that American farmers  respond to signals from the marketplace.  There is every expectation that farmers will once again produce the corn that is needed to meet all demands.”

Expanding Corn  Belt

“We’re seeing a greater increase in the western part of the Corn Belt,” noted odd Davis, crops economist with the American Farm Bureau Federation. “Iowa is projected to increased planted acreage by 500,000 acres, while Nebraska is expected to increase planted acres by 350,000 acres. The Corn Belt is expanding to non-traditional regions. Acreage is projected to expand by 450,000 in North Dakota, and by 850,000 in South Dakota with an increase of 310,000 acres in the southern Unites States as well.”

While USDA is projecting a 4-million acre increase for corn over last year, Davis notes that at current trend yields, corn stocks are not expected to build tremendously. Stocks are expected to increase by just 200 million bushels, if the weather cooperates.

“The story is we are expected to keep stocks relatively tight, under 10 percent, and that’s going to keep the market concerned,” Davis said. “The market is going to be watching closely the planting progress and weather throughout the growing season.”

 

(Check back for additional reaction later.)

 

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