The USDA estimates in 2012 the U.S. will plant 95.9 million acres of corn, the most since before World War II. The record planting estimate surprised the market that was expecting more acres allocated to soybeans and spring wheat. Soybean planted acres decreased by a percent at the expense of the increased corn acres planted. The increase in corn acres in the Prospective Plantings report was bearish for corn, but the Quarterly Stocks report more than offset this increase. The U.S. only has 6.01 billion bushels of corn in stock, well below last year's levels and analyst predictions, implying demand for corn is still high.
Farmers are expected to plant 225.7 million acres of corn, soybeans, and wheat for the 2012 crop year, a 1.8% increase from 2011's 221.3 million acres and the highest since 1982. Improving agricultural economics is incentivizing farmers to plant as much acres as possible. Net farm income for 2012 is expected to be $91.7 billion, the second highest on record.
Corn planted acres for 2012 were estimated at 95.9 million acres, the largest acreage since 1937 and a 4% increase from 2011's 91.9 million acres. High corn prices relative to soybeans and warm, dry weather has encouraged farmers to plant corn at the expense of soybeans.
Record corn acreage is expected in Idaho, Iowa, Minnesota, North Dakota, and South Dakota, while acreage is projected to decrease in the central and southern Great Plains. The large acreage is bearish for corn prices as a big corn crop may rebuild decade low supplies.
Soybean planted acres went in a different direction and was estimated at 73.9 million acres, a decrease of 1% from last year's 75.0 million acres and 5% from 2010. Soybean acreage is down or unchanged across the Corn Belt and Great Plains with the exception of Illinois, North Dakota, South Dakota, and Wisconsin.
If soybean prices continue to rise in the next few weeks, farmers may increase soybean acreage at the expense of corn acreage.
Wheat planted acres were estimated at 55.9 million acres, an increase of 3% from 2011's 54.4 million acres. Spring wheat acres were lower than expected at 14.2 million acres, an only 0.5 million increase from 2010. High wheat supplies provided little incentive for farmers to plant wheat.
Corn stocks as of March 1, 2012 were estimated at 6.01 billion bushels, an 8% decrease from March 1, 2011 and a 150 million bushels lower than market expectations. Of the 6.01 billion bushels, 3.19 billion are stored on farms, down 6% from 2011. 2.82 billion bushels were being held in off-farm locations, a 10% decrease from last year. Disappearance from December 2011 to February 2012 was 3.64 billion bushels compared with 3.53 billion bushels during the same period a year prior.
Soybean stocks as of March 1, 2012 were estimated at 1.37 billion bushels, a 10% increase from 2011 and somewhat in line with analysts’ estimates. On-farm stocks were 555 million bushels, a 10% increase from a year prior. 817 million bushels were located in off-farm locations, another 10% increase from last March. Disappearance from December 2011 to February 2012 was 998 million bushels, a 3% decrease from last year.
Wheat stocks as of March 1, 2012 were estimated at 1.20 billion bushels, a 16% decrease from a year prior. 217 million bushels were held in on-farm locations, down 25% from last March. Off-farm stocks were estimated at 983 million bushels, a 14% drop from a year ago. Disappearance from December 2011 to February 2012 was 462 million bushels, a decrease of 9% from last year.
Corn and soybean prices rallied on this morning’s news. Realistically, we think 95.9 million acres of corn may not be achievable as high soybean prices may cause farmers to make a last minute switch and the fact there might not be enough corn seed to actually plant that many acres. Excellent planting weather may allow farmers to plant as much grain as possible though. We now anticipate the June 1 USDA report, which will provide a more accurate picture of planted acres.