Readers looking for USDA data, and even commentary about the data, have plenty to choose from. As Jerry Gulke said last week, it’s how the market trades that counts. The market voted today: Corn closed 18 cents lower, wheat was 15-19 cents lower. Soybeans managed a gain of 5-7 cents and cotton gained a half-cent. The interest in this report and Grain Stocks will trail off over the next few days and traders will be looking for weather news to fuel the market. For Gulke's post-report comments, click here.
To look a bit beyond the obvious, consider that the acreage of the eight principal crops totaled 324.8 million—roughly equal to all the arable land outside of vegetables, pasture and some minor crops. While that total is down 2 million acres from last year, it is virtually identical to 2012 and 2013, when prices were better. The drop from last year could be explained in several ways: Low prices causing some marginal acres to not be planted is one. Another is double-crop beans, which typically are counted for both crops. Winter wheat is down 1.6 million acres and 190,000 of that is in Illinois and Indiana, two states that double crop. Double-crop beans typically yield less than full season beans, so it could actually cause a small up-tick in bean yields.
More importantly, this survey reflects plans as of early March. These plans may already have changed because comparative profitability has changed. Gary Schnitkey at the University of Illinois developed the map below to illustrate projected profitability of corn versus beans.
Alan Brugler, president of Brugler Marketing and Management, points out we will see changes in the June Planted Acreage report and again in the January Acreage “final” figures. Buried back on page 34 of USDA’s 36-page report are reliability statistics based on the past 20 years. On average, there is a two out of three chance the March report's corn estimate will not be different from the final estimate by more than 1.9% and nine out of 10 chances the difference will not be greater than 3.3%. In the past 20 years, the difference in corn plantings between March and January have averaged 1.17 million acres. The high was 3.84 million and the low was only 32,000 acres. Notice in the table, the March report has been below the final number seven times and above 13 times. This makes sense, given poor weather can causes switches or even prevented planting, while excellent planting weather in the first half of May can result in an addition 500,000 to 1 million acres over intentions.
“This is as it should be,” says Brugler. “The reason for having a prospective plantings report is to let producers know whether too many are planning to grow the same crop before it is too late to change your crop mix. We should expect variance. In fact, it isn’t whether the survey is right or wrong, it is whether plans change.”
For more--much more--on the plantings report as well as the Grain Stocks:
Increase in soybean acreage lower than expected
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