Market expert Jerry Gulke provides his take on the March 31 Prospective Plantings and Grain Stocks reports.
USDA tossed out a friendly round of acreage estimates on March 31, with its annual Prospective Plantings reports. For 2014, USDA expects 91.7 million acres of corn, 81.5 million acres of soybeans, 55.8 million acres of all wheat and 11.1 million acres of cotton.
"The overall theme was less corn and more beans," says Jerry Gulke, president of The Gulke Group.
Typically, Gulke says, around 92% or so of the expected acres are actually planted. With corn acres dropping to 91.7 million acres, yields will now come into play. "If we don’t get don’t get any better yield nationwide than the 158 bu./acre we got last year, that changes the picture significantly," he says. "We could have carryover closer to 1.1 to 1.2 billion bu. in 2014/15."
Listen to Gulke's full audio analysis:
If spring weather makes planting corn acres look questionable, the market will have to respond. "If the corn market needs more corn acres, they are going to have to give us a premium," he says. "These are exciting times."
Yet, he says, the reports create some question. "When you add up all of the state-by-state numbers, there’s something quirky," Gulke says. "There are a half of million or so phantom acres out there."
Gulke says he’ll continue to review the state-by-state numbers and will discuss his findings in this weekend’s AgWeb Market Weekly audio and article.
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