PF Reaction: Bearish Corn Stocks Data

March 28, 2013 06:34 AM


CORN: 97.3 mil. acres; trade expected 97.3 mil. acres
-- compares to 97.2 mil. acres in 2012
SOYBEANS: 77.1 mil. acres; traders expected 78.5 mil. acres
-- compares to 77.2 mil. acres in 2012
ALL WHEAT: 56.4 mil. acres; traders expected 56.4 mil. acres
-- compares to 55.7 mil. acres in 2012
SPRING WHEAT: 12.7 mil. acres; traders expected 12.5 mil. acres
-- compares to 12.3 mil. acres in 2012
DURUM WHEAT: 1.75 mil. acres; traders expected 2.1 mil. acres
-- compares to 2.1 mil. acres in 2012
COTTON: 10.0 mil. acres; traders expected 10.08 mil. acres
-- compares to 12.32 mil. acres in 2012

The markets did an excellent job of anticipating corn, wheat and cotton plantings, but overestimated expected soybean plantings.

Intended corn acres are up just 100,000 from year-ago, right in line with pre-report trade expectations. That, however, doesn't mean there isn't some movement in corn acres around the country. In the Midwest, corn acres are expected to decline from year-ago with corn plantings up in the South. Illinois corn acres are expected down 600,000 from year-ago at 12.2 million acres. Iowa corn acres are expected to be steady at 14.2 million. Indiana corn acres are projected down 150,000 from year-ago at 6.1 million and Ohio acres are expected to be up just 50,000 from year-ago at 4.1 million. Nebraska corn acres are expected to decline 100,000 acres, to 9.9 million. Minnesota sees corn acres up 250,000 from year-ago, at 9 million total.

In the South, Alabama corn acres are expected up 20,000, to 330,000; Louisiana corn planting are expected up 60,000, to 600,000 acres; Mississippi intentions are up 230,000 acres to 1.05 million; Texas corn plantings are expected up 250,000 acres, to 2.1 million.

Northern Plains corn acres are expected to increase with North Dakota corn planting intentions up 500,000 from year-ago and South Dakota corn acres down 250,000.

Bean plantings surprisingly are expected to decline 100,000 acres from year-ago, compared to the average pre-report trade guess of a 1.3-million-acre increase. Of the major bean-producing states, Arkansas is expected to see acres up 50,000; Illinois up 350,000; Indiana down 50,000; Iowa up 50,000; Minnesota down 250,000; Missouri down 100,000; Nebraska down 350,000; North Dakota up 150,000; South Dakota down 150,000 acres from year-ago.

Spring wheat acres came in 200,000 acres above pre-report trade expectations, but durum wheat acres are 300,000 below trade guesses.

Cotton planting intentions are in line with pre-report trade expectations. Cotton plantings in Texas are expected to fall 1.047 million from year-ago with those acres going to corn production as well as a 700,000-acre increase in expected sorghum seedings.


CORN: 5.40 billion bu.; traders expected 5.03 billion bu.
-- compares to 8.03 bil. bu. Dec. 1; 6.023 bil. bu. Mar. 1, 2012
SOYBEANS: 1.0 billion bu.; traders expected 947 million bu.
-- compares to 1.966 bil. bu. Dec. 1; 1.374 bil. bu. Mar. 1, 2012
WHEAT: 1.23 billion bu.; traders expected 1.167 billion bu.
-- compares to 1.66 bil. bu. Dec. 1; 1.199 bil. bu. Mar. 1, 2012

Wow... we knew we weren't using corn very quickly, but this is shocking. The average pre-report trade estimate had March 1 corn stocks 400 million bu. lower than reported by USDA. That indicates unbelievably slow corn use... or it may be the first indication that USDA underestimated the 2012 corn crop. Either way, there's more corn available to the market than expected and the April 10 Supply & Demand Report is likely to show a much-higher carryover than indicated in March.

Corn stocks in all positions as of March 1 were down 10% from year-ago. On-farm corn stocks of 2.67 billion bu. are down 16% from year-ago with off-farm stocks of 2.73 billion bu. down 4% from year-ago. Indicated use in the second quarter of the 2012-13 marketing year was 2.63 billion bu., down 1 billion bu. from the same quarter last year and the lowest second-quarter usage pace since 2003.

Bean stocks in all positions as of March 1 were down 27% from year-ago. On-farm bean stocks of 457 million but are down 18% from year-ago with off-farm stocks of 543 million bu. down 34% from year-ago. Indicated use in the second quarter of the 2012-13 marketing year was 967 million bu., down 3% from year-ago and the lowest since 2008.

Wheat stocks in all positions as of March 1 were up 3%. On-farm wheat stocks of 237 million bu. are up 9% with off-farm stocks of 997 million bu. up 2% from year-ago. Indicated use in the third quarter of the 2012-13 marketing year is 436 million bu., down 6% from year-ago and the smallest since 2010.


The sharply higher-than-expected corn stocks estimate drove old-crop corn futures down the 40-cent daily trading limit. New-crop corn futures are trading well below pre-report levels, but are 23 to 27 cents lower.

Bean futures are feeling spillover pressure from corn and trading sharply lower... and likely headed to limit down. Old-crop futures are about 50 cents lower with new-crop beans 20 to 25 cents lower.

Wheat futures are also sharply lower and trading 30 to 40 cents lower.

Cotton futures are trading off the highs of the day and are trading 15 to 70 points higher.

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Spell Check

3/28/2013 08:34 AM

  Good grief: I wish these bean counters that do these reports make up their mind on what's out here, and frankly they don't have a ----- clue of what's in my Ben or how much corn cattle have ate or how much corn is really produced in this country. If they knew the damage these so knowable reports do to the industry they simply would not do them.


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