Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Acreage Report
USDA’s prospective corn plantings are modestly above pre-report expectations projected at 92.18 million acres. However, in order for ending stocks to use to gain in 2011-12, corn plantings would need to total 93.4 million acres. Farmers intend to plant 76.61 million acres of soybeans. This is below the average pre-report estimate of 76.9 million and also below last year’s actual planted acres of 77.4 million. At 58.02 million acres, all wheat acres are higher than the expected average of 57.3 million. SRW winter wheat is pegged at 41.2; spring at 14.4 and durum at 2.4. Today’s intentions report can’t account for changes in spring wheat reductions due to flooding, which eventually may lead to a decrease in acres compared with the 13.7 million planted in 2010.
USDA’s prospective plantings report shows farmers intend to plant 245 million acres of the five major crops, up from 236 million last year, and above USDA’s Ag Outlook Forum estimate. Cotton acres, at 12.57 million, are up 15 percent from last year. Average pre-report trade expectations for cotton acreage was at 13.15 million. Prospective Plantings: http://usda.mannlib.cornell.edu/.
Quarterly Stocks
Corn and bean stocks were below expectations; slightly more wheat and sorghum on hand than the trade was looking for. Pre-report estimates for corn stocks on hand at the end of February averaged 6.69 billion bushels, suggesting usage well above the five-year average pace for the second quarter. The actual number came in at 6.52 billion bushels, indicating December-February disappearance of 3.53 billion, up from 3.21 billion during the same period last year. This was stronger use than expected.
Soybean quarterly stocks were expected to come in at 1.299 billion bushels, representing second-quarter usage near the five-year average. Soybean stocks were announced at 1.249 billion bushels, slightly below the average and lowest expectations. This represents a 4% decrease in usage compared with the same period a year ago.
The average pre-report estimate for all wheat ending stocks was 1.399 billion bushels, slightly above the average usage pace. All wheat stocks were pegged at 1.425 billion bushels, slightly above average pre-report expectations. Wheat disappearance is up 20% from last year. Quarterly Grain Stocks: http://usda.mannlib.cornell.edu/.
Prospective Plantings
Acreage (million acres)
| 3/31/11 | Average | High | Low | Actual 2010-2011 |
USDA Outlook 2010-2011 |
|
| Corn | 92.18 | 91.84 | 92.60 | 91.00 | 88.19 | 92.00 |
| Soybeans | 76.61 | 76.87 | 78.50 | 75.00 | 77.40 | 78.00 |
| All Wheat | 58.02 | 57.29 | 58.40 | 56.00 | 53.60 | 57.00 |
| Winter | 41.23 | 41.10 | 42.90 | 40.20 | 37.34 | |
| Spring | 14.43 | 13.73 | 14.31 | 13.00 | 13.70 | |
| Durum | 2.37 | 2.55 | 2.80 | 2.40 | 2.57 | |
| Grain Sorghum | 5.65 | 6.65 | 6.75 | 6.50 | 5.40 | |
| Cotton | 12.57 | 13.15 | 13.22 | 12.97 | 10.97 | 13.00 |
Quarterly Stocks (billion bushels)
| 3/1/11 | Average | High | Low | 12/1/10 | 3/1/10 | |
| Corn | 6.523 | 6.690 | 6.880 | 6.552 | 10.057 | 7.694 |
| Soybeans | 1.249 | 1.299 | 1.366 | 1.266 | 2.278 | 1.270 |
| Wheat | 1.425 | 1.399 | 1.488 | 1.275 | 1.933 | 1.356 |
| Grain Sorghum | 0.171 | 0.167 | 0.180 | 0.165 | 0.238 | 0.176 |
Market Strategy
Non-commercial speculators and investment funds can be expected to rebuild long positions based upon the information contained in this report. If demand for U.S. corn increases in 2011-2012, ending stocks could fall to near 500 million bushels. This would equate to an ending stocks-to-use ratio of 3.8% (currently 5%). This takes into account near-ideal planting and growing conditions, resulting in a trend-line yield of 162 bushels/A. Quarterly stocks were lower-than-expected at 6.523 billion bushels. Old-crop export sales were reported at 75.4 million bushels, well above the 21.6 million bushels needed to stay on pace with USDA’s 1.95 billion bushel projection.
Planting intentions for soybeans were reported to be slightly below pre-report expectations. This means that domestic stocks could move below 100 million bushels and stocks-to-use near 3% in the next (2011/2012) marketing year. Quarterly stocks were reported to be less than expected, meaning domestic ending stocks for 2010-2011 could decline in the April supply and demand report. Export sales and shipments were bullish as old-crop sales of 5.3 million bushels and shipments of 30.4 million bushels were above the amounts needed to stay on pace with USDA’s 1.59 billion bushel projection.
The Prospective Plantings and Quarterly Stocks reports were considered bearish for wheat. Spillover support tied to the rally in row-crops should provide support. Old-crop export sales of 10 million bushels were disappointing but above the 5.8 million bushels needed to stay on pace with USDA’s 1.275 billion bushel projection. However, shipments of 32.6 million bushels fell short, meaning all wheat shipments will need to average 43 million bushels the last nine weeks of the marketing year.
Currently, Dec ‘11 corn futures are trading at $6.25 (limit-up); Nov ‘11 soybeans at $14.06 (up 42 cents); and July ‘11 SRW wheat is trading at $7.84 (up 20 cents per bushel).
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.