Farmers have their own version of March madness next week. Jerry Gulke shares his predictions for USDA’s Prospective Plantings report.
The countdown is on to USDA’s Prospective Plantings report, which will be released March 28 at 11 a.m. Will we have another record-breaking year for total acres planted? Which crop will win the battle?
Jerry Gulke, president of the Gulke Group, says he’s predicting just as many or more corn and soybean acres this year.
But, he expects some shifts to occur, especially in areas that were hit hard by the drought last year. "I would expect some changes from corn-on-corn to back to a corn-soy rotation," he says.
The weather now and through planting season will be a major factor, as always, especially now that weather patterns are finally starting to shift. "A month ago we were talking about how dry it was going to be forever and ever and now we’re worried about getting our crops in the ground east of the Mississippi River," Gulke says. "My how the times have changed."
Official Acreage Estimates
(in million acres)
Gulke says that based on Informa’s predictions, it expects the recent run up in beans and drop in corn will chase some of those acres back to beans.
The industry chatter, Gulke says, is that with the recent price improvement for cotton, maybe cotton acres won’t decrease as drastically as predicted earlier this year. But, he believes the number will still be down, and whatever acres don’t go to cotton will go to corn. "Corn is cheaper to plant than cotton."
History tells us USDA’s Prospective Plantings will have some major price implications. But, after the report dust settles, which way are prices headed?
December 2013 corn is hovering around $5.50. Gulke believes it will take severe crop failure or success in major corn-growing areas to cause major swings. "I don’t think we’ll get $7 corn again unless Illinois or Iowa has a problem. We don’t get $4 corn unless the main Corn Belt has a great crop."
The good news is this situation leaves lots of room for error. "In essence, I could do nothing [in terms of marketing]," he says. "If I get 200 bu.-corn and sell it for $4, that’s $800 an acre. If I get 140 bu.-corn and get $7, that’s nearly $1,000 an acre."
Hear Gulke's full audio analysis:
For More Information
AgWeb will continue its pre-report coverage of the March 28 Prospective Plantings report. Here are a few items to read now:
Prospective Plantings Preview: 10 Key States
Preview of the Quarterly Stocks and Prospective Plantings Reports
See current market prices in AgWeb's Market Center