Corn Stocks Well Above Analyst Expectations
Mar 28, 2013
Corn, soybean, and wheat prices all substantially decreased due to above average estimated quarterly stocks in today's USDA reports. The biggest surprise came with corn stocks of 5.40 billion bushels, 400 million bushels above analyst's average estimate. The Prospective Plantings Report held no surprises but continues to forecast a record corn crop.
Prospective Plantings Report
Corn planted acres for 2013 were estimated at 97.3 million acres, the largest acreage since 1936 and up slightly from 2012. Low inventories of corn resulting in record high prices have incentivized farmers to plant more corn relative to soybeans. North Dakota, not known for their corn growing capability, is estimated to plant 14% more corn compared to last year.
Soybean planted acres were estimated at 77.1 million, a 1% decrease from last year's 77.2 million acres. Soybean acreage was increased the most compared to last year in Illinois and North Dakota, whereas planted acres were decreased the most in Nebraska and Minnesota.
All wheat planted acres were estimated at 56.4 million acres, an increase of 1% from 2012. Winter wheat planted acres were estimated at 42.0 million, a 2% increase year over year. Large wheat supplies are providing little incentive for farmers to plant wheat.
USDA reported 5.40 billion bushels of corn on hand as of March 1, 2013, a 10% decrease from the same time last year. Of the total stocks, 2.67 billion bushels were stored on farms, down 16% from 2012. Off-farm stocks were at 2.73 billion bushels, down 4% from a year earlier. December 2012 to February 2013 disappearance was 2.63 billion bushels, compared to 3.62 billion bushels a year ago.
Soybean stocks decreased 27% compared to last year with 999 million bushels as of March 1, 2013. Stocks stored on farms totaled 457 million bushels, an 18% decrease from last year. Off-farm stocks decreased to 543 million bushels, down 34% from last March. December 2012 to February 2013 disappearance was 967 million bushels, a decrease of 3% from last year.
Wheat stocks increased by 3% from last year with 1.23 billion bushels being reported on March 1, 2013. On-farm stocks were estimated at 237 million bushels, a 9% increase from last March. Off-farm stocks were up 2% from last year, coming in at 997 million bushels. The December 2012 to February 2013 disappearance was 436 million bushels, down 6% from March of 2012.
All three grain prices (corn, soybeans, and wheat) have plunged $0.40 to $0.50 on the front month. We now will turn our attention to April and the beginning of planting season. With excess moisture, will farmers be able to get into the fields to plant on time? Is 160+ bushels an acre average corn yield realistic? What will weather bring this year after 2012's historic drought? These and many other questions remain to be answered.
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