Grains ended mixed after USDA report day, with cotton and livestock mostly lower.
Darren Frye with Water Street Solutions says the reaction to the USDA Prospective Plantings and Quarterly Stocks Reports was rather benign.
U.S. corn acreage was up nearly 4.8 million acres and the highest in 12 years and reflects higher profit potential for corn verses soybeans.
However, Frye says corn ended off its lows as he thinks the market was pricing in an even higher acreage figure than the 95.3 million acres the USDA delivered, plus quarterly stocks are tight.
“I expected the corn market to maybe be down 10 or 15 cents new crop corn. That’s not what happened. And so that tells me the trade was already leaning toward a much bigger number than maybe what those estimates were,” he explains.
Corn acres are up in nine of the 10 top producing states.
Compared with last year, corn plantings are expected to increase 300,000 acres in Illinois, 200,000 acres in Indiana, 600,000 acres in Iowa, 400,000 acres in Minnesota, 350,000 acres in Missouri, 550,000 acres in Nebraska, 250,000 acres in North Dakota and 400,000 acres in South Dakota.
Frye says trend line yield will be a tough lift on corn with the additional corn on corn acres on fringe areas.
He says, “We had a pretty ideal year last year and we only ended up with 179. And I know
that’s because the drier into the growing season. If we’d have gotten another inch or two of rain, hey, probably would have been 182 but there’s always something that goes wrong and I’m using 175 .6 of my balance channel that’s way smaller and what they’re trend line yield. That’s a three -year average when you look at it,” he explains.
USDA estimates soybean acres will fall to 83.5 million acres, down 3.55 million acres from last year.
However, soybeans ended lower on the session as Frye again thinks the market was pricing in an even lower figure.
Compared with year ago, soybean acres acre expected to fall 300,000 acres in Illinois, 100,000 acres in Indiana, 450,000 acres in Iowa, 230,000 acres in Kansas, 400,000 acres in Minnesota, 200,000 acres in Missouri, 300,000 acres in Nebraska, 400,000 acres in North Dakota, 350,000 acres in South Dakota and 250,000 acres in Wisconsin.
Frye thinks ending stocks could be between 350 and 400 million bu. for the season as trend lines yields are unlikely in soybeans, just like in corn.
“Actually, 50 .7 is the three -year average and that’s what I am using on my balance sheet projections as dry as it is in the Western Corn Belt,” he says.
All wheat planted area for 2025 is estimated at 45.4 million acres, down 2 percent from 2024. Its the second lowest all wheat planted area since records began in 1919. The 2025 winter wheat planted area, at 33.3 million acres, is down less than 1 percent from last year.
Area expected to be planted to other spring wheat for 2025 is estimated at 10.0 million acres, down 625,000 from the 2024 estimate. Of this total, about 9.40 million acres are Hard Red Spring wheat. Durum planted area for 2025 is expected to total 2.02 million acres.
All cotton planted area for 2025 is estimated at 9.87 million acres, down 12 percent from last year. Acres in Texas are expected to fall 456,000 acres to 5.527 million acres.
Yet cotton prices were still lower on the day as Frye says that market is concerned about tariffs and recession.
Corn stocks in all positions on March 1 totaled 8.151 billion bu., matching trade expectations but down nearly 100 million bu. from last year.
Frye says that means the bulls spreads will continue to work in the corn and support the tight old crop contracts and $4.50 may be the low.
Soybean stocks in all positions on March 1 totaled 1.91 billion bu., just 9 million bu. above the average pre-report trade estimate and up 75 million bu. from March 1, 2024.
Wheat stocks in all positions on March 1 totaled 1.237 billion bu., 22 million bu. above trade expectations and 151 million bu. higher than a year ago.
