Two of the year’s biggest reports are slated for March 31, the annual Prospective Plantings report and the quarterly Grains Stocks report. USDA will release both reports at 8 a.m., CDT. Early estimates show cotton and corn will likely pull acres out of soybeans.
Allendale, the first major brokerage firm to release survey-based planting projections, estimates that producers will plant 91.291 million acres to corn, up 3.099 million acres from last year’s 88.2 million, but still lower than USDA’s recent estimate of 92 million acres. “The western Corn Belt will put fewer acres into beans and more into corn,” says Rich Nelson, director of research for Allendale. “There will be a modest switch from beans in the eastern Corn Belt as well.”
Forecasting a trend yield of 162 bushels per acre, Nelson notes that corn production in 2010-11 could hit 13.551 billion bushels, up 1.1 billion bushels from last year. That should boost 2011-2112 ending stocks by 100 million to 200 million bushels.
“Cotton will be a factor, taking away corn acres down South,” says Nelson. Allendale predicts producers will plant 12.4 million acres to cotton, up 1.4 million acres from a year ago. USDA put upland cotton acres at 12.8 million, a 2 million acre increase from a year ago.
Allendale’s survey shows soybean acres will slip to 77.193 million acres. With a trend yield of 43.5 bushels per acre, total production will fall by 11 million bushels to 3.319 billion bushels. “The net increase in supply will be 15 million bushels,” Nelson adds. “While demand will be lower, there will still not be a dramatic increase in supply.” Soybean ending stocks for the 2011-12 crop year should rise by about 300 million bushels, he adds.
USDA’s latest planting estimate put soybean plantings at 78 million acres, up 300,000 acres from last year’s 77.7 million acres, and more than 800,000 bushels higher than Allendale’s estimate.
Allendale expects growers to plant 57.4 million acres to wheat. Coupled with a 43.6 bushel per acre yield, that puts the crop at 67 billion bushels, down 260 million bushels from a year ago.
Nelson expects prices to stabilize through planting. “This really points to getting the yield done this year,” he says. “This will not give us a bull market.”
He notes that heavy snow cover in states like North and South Dakota, where growers are expected to plant an additional 6 million acres of corn this year, could cause problems during the upcoming planting season. “There will be problems with flooding. Fields will be wet,” says Nelson. “Our forecasters tell us (those states) aren’t going to dry out by spring.”
While the Prospective Plantings report will define the lines in this year’s competitive acreage battle, it won’t settle it. In 2007, by June producers had planted 5 million acres more to corn than they had anticipated planting in the March survey.
With USDA’s estimates all higher than Allendale’s, one wonders where the higher acre estimates from USDA will come from. USDA notes that about 500,000 acres of the additional cropland will come from an increase in Conservation Reserve Program (CRP) land. Allendale expects 400,000 additional acres to be taken out of CRP.
The states included in Allendale’s survey account for 87 percent of corn production.