When corn growers start planting this spring, they'll probably keep planting corn until they've seeded nearly 96 million acres.
They'll do that unless weather stops them before they've finished planting, says one analyst.
"Final acreage for corn and soybeans does differ" from the Prospective Plantings report, said Bill Tierney, chief economist at AgResource Company, Chicago. However, he said on a CME Group conference call that a study of acreage and price changes did not find a statistical relationship between changes in expected returns and planted acreage.
"There's usually a little switching," he said. "It wasn't economic factors. It was the weather, specifically the pace at which the corn crop is planted."
Tierney said farmers tend to have slightly more corn seed available than they intend to plant. "If they have an open window, they plant the corn seed," he said.
- Corn planting on 95.9 million acres, up from the average trade estimate of about 94.7 million and last year’s plantings of 91.9 million acres.
- Soybean seeding on 73.9 million acres, down from the average trade estimate of nearly 75.5 million and last year's acreage just under 75 million.
- All wheat area of 55.9 million acres, down from the average trade estimate of 57.6 million but up from last year's 54.4 million acres.
Corn Acres Up; Stocks Down
The prospective corn acreage figure was not far from expectations, but "I think it's going to weigh on the corn market," said Scott Shellady, derivatives manager and grains specialist for ICAP US, Chicago.
However, USDA also reported this morning that March 1 stocks of corn
were down to 6.01 billion bushels, compared with average trade estimates of 6.15 billion.
"Clearly, I think the stocks number is bullish," and will push the old crop-new crop spread wider, said Shellady.
Surprise: Soybean Acres
While the stocks number is supportive for old-crop corn, "There was almost no surprise in the stocks report" for soybeans, said Tierney. USDA estimated March 1 soybean stocks at 1.37 billion bushels, which was between the average estimates in two analyst surveys.
"The big surprise in soybeans was the acreage number," said Tierney. "It was 2.1% below the average of industry expectations and below the low end."
However, after Prospective Plantings
and Grain Stocks reports
are issued, soybean futures have been more influenced by corn futures than by soybean fundamentals, said Tierney. The soybean stocks figure was neutral, the prospective soybean acreage number was very bullish, and and a bullish response to today's reports was expected in corn.
South American crop prospects are another dominant factor. Traders and analysts expect the soybean crop there to be 4 million to 7 million metric tons less than currently projected. "That is another bullish element the market has to contend with," said Tierney.
Possible Acreage Shift
While Tierney said history shows growers keep planting corn if weather allows, Jerrod Kitt, director of research at the Linn Group, Chicago. maintained that some acreage may shift from corn to soybeans.
"By now 95% of your production is pretty much locked in" because of field preparation ahead of planting, he said. "There's very little room to maneuver."
But Kitt said he wouldn't be surprised to see 2 million more acres of soybeans planted than indicated in the Prospective Plantings report. For the past month or more, soybeans have been trying to attract acres, he said. "We feel they probably are doing a pretty good job."
Soybean price gains have pushed prospective net revenues to 5 percent to 10 percent more than corn net prospect, he said.
Kitt added that the potential for corn seed shortages has been well publicized. If growers plant early but need to replant, seed may not be available, he said. "If we have a wet spring and flooding, you could get a boost for bean acreage as well."