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Planting intentions and grain stocks

By Staff | Apr 14, 2020

-Farm News file photo USDA?is predicting close to record corn acres will be planted this year. The estimate is just 300,000 acres off the all-time record planted in 2012.



USDA released their March planting intentions and grain stocks report last week, calling for an almost record breaking number of acres dedicated to corn this year.

Todd Hultman, DTN lead analyst said this particular report, isn’t the most serious of reports, in his opinion, from USDA, but does provide an inclination of what producers are planning to do this spring.

USDA’s corn planting estimates for 2020 came in at 97 million acres, which was much higher, Hultman said than trade estimates were expecting.

“It is outside the average range of guesses and within 300,000 acres of the all-time record high planting in 2012,” he said. “This is a very bearish number. To have this coupled with the ethanol concern we have going on in the market right now, it is very tough to take.”

Planting intentions for soybeans were less than expected at 83.5 million acres. The trade, Hultman said was actually looking for about 84.7 million acres.

Wheat planting intentions came in at 44.7 million acres, which is a new record low falling below last year’s 45.2 million acres.

Cotton, Hultman said was a bit of surprise, staying even with last year’s 13.7 million acres.

“Cotton prices are so depressed, I was concerned that planting intentions would drop and perhaps add to our corn and soybean totals,” he said.

When the acres of the “big three crops:” corn, soybeans and wheat are totaled together, Hultman said that makes for 225.2 million acres.

“That’s just down 700,000 acres from what we saw two years ago. So, in other words, I would say USDA is pretty optimistic about the amount of acres that will be able to come back into production this year,” he said. “I would be a bit skeptical we are going to have this high of a three crop total.”

Hultman reminded the planting intentions survey was taken during the first two weeks of March.

“The OPEC decision to increase oil production happened on March 7 and corn prices really didn’t react until a week later with a new low,” he said. “Needless to say, there could be some changes between what we see here in this survey and what actually gets planted.”

March 1st grain stocks

The March 1st grain stocks, Hultman said is part of the report, as an analyst, that he was looking most forward to from USDA.

“I think it is one of the clearest, and most straight forward USDA offers us,” he said. “Basically giving us inventories and it’s also the best read on demand that we have. It plays a key part in how numbers get adjusted in the WASDE report later.”

Corn stocks

Corn stocks, Hultman said came in lower than expected at 7.95 billion bushels (bb).

“Corn stocks were expected to come in around 8.2 billion bushels. This is significantly lower,” he said. “Definitely lower than the 8.6 billion bushels we saw a year ago.”

USDA did note that the 7.95 bb total still includes corn in the fields.

“Without making the comment on the amount of corn there, they are just reminding us the total, in actuality, could be less than the 7.95 billion bushels because quite frankly, not all of the corn measured that’s still in the fields probably will get to a decent harvest. There is still a risk of corn loss there,” he said.

Corn demand in the first half of the 2019/2020 season, Hultman said was slightly above 8 bb the third highest on record.

“I would say given the fact that we knew exports were in the hole this year, corn demand did pretty good holding up, but, that was before ethanol had problems in this timeframe and we have good feed demand usage going on, so a fairly decent first half of the year for our U.S. corn demand,” he said.

Soybean stocks

Soybean stocks Hultman said came in neutral to a little higher than expected at 2.25 bb.

“The market was looking for 2.24 billion bushels, so we could really call this a neutral report for the soybeans,” he said. “It’s down almost 500 million bushels from a year ago.”

Soybean demand for the current season in the first half of the year is 2.23 bb.

“We are still being limited by the trade dispute in China and that showed up in the first half of the season, a little higher than a year ago, but not much,” he said. “It’s certainly down from totals of the previous four to five years.”


Hultman said, as he looks at the situation with the coronavirus as things stand right now, obviously it still has a very bearish impact on U.S. agricultural products.

“It’s basically scaring buyers out of marketing, keeping investors nervous, so that certainly doesn’t help things,” he said. “We also have a lot of concerns about economic growth and GDP (gross domestic product) going to nothing or negative, a quarter or two here. We are still in a situation where fatalities are rising rapidly. The rate of increase peak has been expected by several sources. Just over the weekend there seems to be a little more consensus they are expecting a peak of this infection rate in the next two to four weeks, we will have to see, of course how that plays out. Just the fact that more sources are saying that, perhaps, gives us a little bit of light at the end of the tunnel here.

Hultman said it is obvious there is a concern about the lack of economic and social interaction in the economy in terms of energy demand.

“We are concerned about sharply lower gasoline demand and that whole situation being exaggerated by Saudi Arabia’s decision to increase oil production had direct ramifications on ethanol production that we are concerned about in our ethanol markets,” he said.

On the brighter side of things, Hultman pointed out that people keep eating.

“That is an underlying trend that continues through this time and coronavirus has not changed that underlying reality,” he said.

Another factor that has helped U.S. commodities is some transportation difficulties in other countries.

“We are hearing about slower movement of goods in Argentina,” he said. “That has helped our soybean prices of late and could be a possible bonus for soybean demand this year if they continue to have problems moving goods in that country. That has been kind of an unexpected help in this situation.”

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